Is it really important to have reward systems? Why is that?

The Significance and Benefits of Rewards

            Rewards may seem a very simple thing to some. They wouldn’t think that it is an issue that is essential in setting the productivity of the company. Once you think of it deeply you realize how important it is to companies.

Thinking deeply about rewards will make you think of its benefits to companies. A total reward approach has many benefits. In this article I will be talking about one of the benefits that in my opinion is the most important one.

            “Winning the war of talent” (Armstrong, M. 2007) is one of the benefits that can make an organization one of the best in the market. The Koala Consulting and Training mentioned in their article that one of the benefits of rewards is attraction: “A reward system is intended to attract and retain suitable employees. An employer who develops a reputation as “cheap” is unlikely to be desirable in the job market, because potential employees will think it does not reward effort. Such an organization is likely to end up with the people that nobody else wants.” (Reward Systems, 2008) If the reward system in a company made the employees comfortable in the workplace and if it caused the increase of productivity this will be a good sign to attract employees from other companies. If the company became an “employer of choice” or “a good place to work” it will attract the talented employees that are found in the market of employees. It will encourage employees that are working on other companies to want to work in this company. It will make them apply for jobs in the company even if there were no vacancies. This will make the company gain comparative advantage. It will make it be one of the best companies in the market since it has the best employees. The company will get all the talents needed to reach the quality and goals that are set.

            The previous paragraph shows the significance of rewards. As Sandra O’Neal mentioned total reward strategies can address the issues created by retention and recruitment. It can also influence the behavior of the employees.


Armstrong, M. (2007). Employee Reward Management And Practice.  Great Britain: Bell & Bain.

Reward Systems. (2008). Koala Consulting and Training. Retrieved November 28, 2010, from