Current reward systems in Western countries and Russia
Posted: Sat Feb 01, 2025 6:52 am
In the corporate culture of the United States and other Western countries, a reward system that includes bonus programs has long been a standard. Such bonuses can be offered to reward specific achievements of a particular employee or group of employees. However, for a bonus and premium system to work effectively, it must be strictly structured and transparent, otherwise employees will begin to perceive bonuses as a guaranteed part of their salary, independent of their intermediate achievements.
West
Nowadays, most Western companies prefer to use reward systems that take into account the contribution to achieving departmental or company-wide goals. One example of this type of reward system is profit sharing.
Profit sharing
This system involves distributing a luxembourg email list certain share of the company's net profit among employees for a certain period. This is intended to stimulate employees to increase productivity, as well as to increase their involvement in the company's activities. Employees who have the opportunity to receive a percentage of the profit begin to take the company's success more seriously, handle its property with care, and strive to improve the effectiveness of their work.
This approach to forming a reward system can also help reduce employee turnover. To be eligible to participate in profits, an employee must work for the company for a sufficiently long time (two to four years), which encourages them to cooperate with the organization for a long time.
Stock Options
Stock options are a tool that is often used in Western corporate practice as part of a long-term incentive and reward system. This tool allows mid-level and line employees to purchase shares of the organization at a predetermined price. This system of company remuneration is aimed at increasing their interest in the success and growth of the enterprise value.
Stock Options
Source: shutterstock.com
Such forms and systems of remuneration as stock options are distinguished by their long-term orientation: in order to exercise the right to purchase shares at a preferential price, an employee must work for a certain period of time in the organization, which is also an element of the system of rewards and punishments, encouraging long-term loyalty.
Recognition programs
The Western management system shows that money is not the only and main motivator for employees. The opportunity to receive non-material recognition is also an effective way to encourage employees. For many people, it is important that their work is noticed and appreciated by the team.
Recognition programs can take many forms: structured programs with regularly scheduled events or informal, personal forms of recognition such as the opportunity to work from home, extra time off, or flexible scheduling for an employee who has achieved outstanding results.
Recognition can be symbolic, such as a personalized mug or other memento. However, the effectiveness of this method depends on the context and size of the company. Smaller organizations with closer working relationships may value such symbolic gestures, while employees of larger companies may expect more substantial forms of recognition.
West
Nowadays, most Western companies prefer to use reward systems that take into account the contribution to achieving departmental or company-wide goals. One example of this type of reward system is profit sharing.
Profit sharing
This system involves distributing a luxembourg email list certain share of the company's net profit among employees for a certain period. This is intended to stimulate employees to increase productivity, as well as to increase their involvement in the company's activities. Employees who have the opportunity to receive a percentage of the profit begin to take the company's success more seriously, handle its property with care, and strive to improve the effectiveness of their work.
This approach to forming a reward system can also help reduce employee turnover. To be eligible to participate in profits, an employee must work for the company for a sufficiently long time (two to four years), which encourages them to cooperate with the organization for a long time.
Stock Options
Stock options are a tool that is often used in Western corporate practice as part of a long-term incentive and reward system. This tool allows mid-level and line employees to purchase shares of the organization at a predetermined price. This system of company remuneration is aimed at increasing their interest in the success and growth of the enterprise value.
Stock Options
Source: shutterstock.com
Such forms and systems of remuneration as stock options are distinguished by their long-term orientation: in order to exercise the right to purchase shares at a preferential price, an employee must work for a certain period of time in the organization, which is also an element of the system of rewards and punishments, encouraging long-term loyalty.
Recognition programs
The Western management system shows that money is not the only and main motivator for employees. The opportunity to receive non-material recognition is also an effective way to encourage employees. For many people, it is important that their work is noticed and appreciated by the team.
Recognition programs can take many forms: structured programs with regularly scheduled events or informal, personal forms of recognition such as the opportunity to work from home, extra time off, or flexible scheduling for an employee who has achieved outstanding results.
Recognition can be symbolic, such as a personalized mug or other memento. However, the effectiveness of this method depends on the context and size of the company. Smaller organizations with closer working relationships may value such symbolic gestures, while employees of larger companies may expect more substantial forms of recognition.