Furthermore it will consider the possible types of rewards that a company can offer its employees.
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Type of Reward Systems.
1. Piece Work.
Employees are rewarded for the completed pieces of work, based solely on performance. The advantage of this system is that it stimulates productivity, prevents incomplete work and it is easy to measure. The disadvantage is that it only takes "production- in to account and it could result in rushed work with poor performance. In the knowledge management environment one could think of small project tasks that are completed with the assistance of a KMS.
2. Performance Related Pay (PRP).
Employees receive bonus payments based on a systematic assessment of performance generally linked to some method of performance appraisal (Brophy, 2003). Although this can facilitate participation, co-operation and feedback, it is very hard to find suitable measures for performance and therefore there exists some danger for subjectivity and bias. In the field of knowledge management this kind of system is often point-based where certain points are given for logging on to the system, sharing knowledge, searching and screening.
3. Skill based pay.
This system rewards employees' acquired and applied skill rather than the actual job they do. This reward system is relatively new and has shown to be very positive in terms of job satisfaction, productivity and quality. Furthermore it contributes to job enrichment and provides incentives for self-development. However, because the employees are busy developing skills this leaves less time for the actual work. Therefore the (initial) costs involved are relatively high and in this system huge efforts must be undertaken to minimise employee turn over. In the area of knowledge management this reward system is often implemented as a pay-for-knowledge system. Employees are rewarded in their wages for the new skills they acquire. Employees rate themselves and others on their proficiency in performing relevant skills, with the higher ratings given to the ability to teach others.
