Coca-Cola Reward Management System – Essay

free essayAll Reward Management Systems (RMS) deal with formulating and implementing policies and strategies that aim at rewarding employees equitably and fairly. This must be consistent with the values of both organization and individuals to ensure achievement of strategic goals. In a general context, RMS designs, implements and maintains a company’s reward system. In the end, the needs met by the reward systems are beneficial for both the organization and other key players of the company. They can be in the form of tangible services, financial returns and other benefits that staff members receive in the course of their employment. The most important element that ensures a successful reward system is fairness. This is crucial when it comes to the reward allocation processes. Today, many companies have discovered that compensation and other forms of bonuses are not enough when it comes to retaining talents.

Elements of a Reward Management System (RMS)

Rewards, according to most surveys, are what employees get from their employers at any point in time for their good performance. The main elements here are compensation (incentives and base pay), work-life balance, benefits, recognition and development of career opportunities. For most companies, these are key motivators that help to build employee commitment. The key issues are total rewards. The strategy ensures satisfaction, production and engagement of employees who ensure business performance. In the compensation category, the company could offer them as long-term or short-term, based on the company’s performance. Benefits for the employees should be beyond the legally mandated ones, like disability and health insurance (Michaelson 2013).

For the reward system to be effective, the main components are fairness, equity, culture, strategic alignment and transparency. The management of any company that adapts rewards system must use the components mentioned above to ensure maximization of reward initiatives. Apart from financial and non-financial, rewards can also be tangible and intangible. Tangible rewards can be monetary in nature, including bonuses and pay-raises, gifts and samples of company products. Intangible rewards can be written or verbal rewards, as well as appreciation letters. Different types of rewards have different results, as explained below. For instance, giving employees company shares results in an increase in loyalty levels of employees, as well as future performance (Armstrong 2010, pp. 55-56).

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Coca-Cola Reward Management System (CMS)

Introduction to Coca-Cola (Australia)

Coca-Cola Australia is currently a partner to the bottling company, Coca-Cola Amatil. Together, they offer approximately 240 products internationally. Such include regular drinks with low kilojoules like water and energy drinks. The leading brands of the company, as of 2014 were diet-coke, Sprite, Coca-Cola Zero and Coca-Cola. To have come this far, the company owes its success to devoted employees and their high level of output. According to the annual reports, the company manages to retain and attract the best talents in the markets, based on the current reward system (Monaaa 2008, pp. 1-4). This motivates the employees in many ways, resulting to increased productivity for the Australian company. Coca-Cola Australia rewards its employees for the good work. In all the regions where the company operates, the main priority is treating employees well and giving them a rewarding work life. The end environment enables employees to excel in their duties, improve in competence and skills and advance in their career goals (Reynolds 2005).

Role of Coca-Cola Management in Reward Systems

Reward systems and their associated strategies ensure employee effectiveness, job satisfaction and performances. With good management, employees are able to strike a balance between the work-life and the personal needs. The role of management in this context is to provide support that can be financial or non-financial. The key participants in the RMS, such as the human resources, can undertake the activities involved in the reward management system. The full participation of employees in the reward management system is also a good motivation for the employees and other key stakeholders. This shows collaboration and commitment by Coca-Cola management when ensuring the well-being of its employees is the top priority. In the end, employees are motivated to work and deliver as expected. This also promotes easy and fast decision-making, when it comes to choosing the type of reward system to be used within the company (Silva 2013, pp. 7-10).

Relationship between HTRM Practices and RMS

In companies like Coca-Cola, all human resource activities are linked to the output of employees. Reward Management works with policies, processes and strategies used to ensure employee contribution is appreciated. This recognition can be either financial or non-financial. Apart from motivating employees and the company’s shareowners, rewards are meant to attract competent and highly qualified employees. Coca-Cola Australia uses a system that aims at building a labour force that is aligned and motivated to organizational development. Such include planning, description of individual jobs, recruitment and training (White 2005, pp. 23-40).

The human resource management ensures a sense of equality in all the reward system initiatives. For instance, all employees are given opportunities to attend the training and other smart activities that help develop their interpersonal and professional skills. Apart from the factors mentioned above, human resource practices at Coca-Cola Australia help to establish good employee-employer relationships. With such activities, it is possible for the company to face changes without resistance from the company employees. Such include on job training, provision of in-house training and development facilities. From these programs, the HRM conducts promotions based on individual performance. The human resource department is responsible for all training activities and programs at Coca-Cola (Fransson & Frendberg 2008, p. 24).

In Coca-Cola Australia, there are human resources systems that are important in the rewards management system. Such include compensation, diversity education, mentoring and career development. In the compensation system, most decisions centre on job classification, establishment of base pay and consequent evaluation of the fairness involved in rewarding employees. Career development enables the company to assess individual skills, define their career objectives and develop new skills that may be important for the company (Silva 2013, p. 8).

Rewarding Systems at Coca-Cola Australia

In the context of a changing environment, a reward system is a good technique when it comes to maintaining and motivating employees.

The rewarding system used by the company is based on performance and function.

  1. Function Reward System – In this system, employees are rewarded based on length of service. This applies for all blue-collar workers. This is, however, different for all white-collar employees. In this case, one is rewarded based on the rankings within the company. Those in high ranks get higher rewards.
  2. Performance Reward System – the rewarding systems are relational and financial. While the financial category comes with both the benefits and the pay, the relational aspect provides the work environment, learning and development. From this, it is evident that employees go for both financial and relational rewards based on what best appeals to them. All these aim at developing the individual, bringing about recognition and working in a good environment. Financially, the rewards come in the form of company cars, disabilities and pension plans (Armstrong 2010, p. 77).

The proof of the employee’s commitment is evident in the Total Rewards Program. This entails benefits, compensation procedures, learning and development. Additionally, the company’s working environment is aligned to the frameworks that define the operations (White 2005, p. 30). Coca-Cola uses encouragement and recognition as driving forces for success. The reward systems for Coca-Cola vary from region to region, but all have the aim of fostering excellence (Fransson & Frendberg 2008, p. 35).

Parameters used in the Reward System:

  1. Factors related to inflation rates
  2. Marketing potential based on individual expertise
  3. Individual development of each employee
  4. Sales rewards

Types of Rewards in Coca-Cola

  1. Yearly Basis Rewards – can be in the form of salary increments for employees, change of designations and sometimes grade jumps. Additionally, there is an AIP (Annual Incentive Plan), which handles business performance. The PRR (Personal Progress Report) looks into annual appraisals.
  2. Monthly Basis Rewards – this works with the achievement of a monthly sales target and managing to make the move. The other important element here is the extraordinary performance of individuals.
  3. Quarterly Basis Rewards – does not deal with sales. An example of such rewards is that of employee of the quarter.

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Examples of Rewards in Coca-Cola


The company’s key objectives are brand building, improvement of customer service and value-maximization for the shareowners. To achieve all this, the company relies on its employees. The compensation program for the company helps to attract, retain and motivate employees. An example of compensation in the company is hourly wages or base payments (Jiang, Xiao, Qi & Xiao 2009, p. 4). Employees are also given the privilege of participating in incentive programs that result to improved group, individual or overall performance of the company. Criteria for using this reward are based on the role of employee in the company and the specific incentive plans (Armstrong, Brown & Reilly 2011, p. 16).


The company offers several programs that cover health, retirement and finances. Such benefits turn out to be competitive in the market and affordable to the employees and the company, while being valued by all. The major plans the company invests in are retirement programs, medical coverage that includes vision and dental, savings and life insurance plans. To measure the effectiveness of the employee benefits, the company benchmarks itself against the existing competitive companies. Based on the company’s diverse culture, there are different benefits for different people ( 2012).

Additionally, the benefits of permanent employees differ from on contract and temporary agreements. For instance, permanent employees enjoy the benefits of company share participation, superannuation, product allowances and medical schemes. Some are allowed to participate in incentive programs based on their position, as well as purchasing privileges. Financial rewards for most employees are meant to motivate individuals, hence the competitive compensation (Johnston 2014). To get to this, the company conducts a performance review that gives the chance to receive their rewards. The other reward initiative by Coca-Cola is the Red Tag program which rewards workers with merchandise and travel. Apart from getting tuition reimbursements, children of employees also qualify for scholarships and other school benefits (Bjerndell & Severin 2013, p. 78).

Learning and Development

Unlike most successful companies, the company also invests in mentoring and training programs. To achieve this, it provides developmental and learning programs that aim at maximizing employee’s professional growth. With this, it is possible to manage individual professional paths, while driving advancements in the company. An example of the training and development initiative is that of Coca-Cola University which turns out to be a teaching environment for the company employees. In the course of training, the employees are given chances to work in different fields to widen their skillset (Bjerndell & Severin 2013, pp. 59-62).

Work Environment

Coca-Cola Australia sets up positive relations with its employees by encouraging honest and open communications. Additionally, the company engages employees in the decision-making process, thus creating a diverse and inclusive culture. Some of the initiatives taken up in a good work environment are provision of gym services, newsrooms, restaurants and flexible working hours. In this form of reward, the company considers the health and well-being of all its employees. From this, the management ensures a complete balance between the personal life and work demands of its people (Bratton & Gold 2007, p. 222). Employee well-being requires individuals to lead active and healthy lives. To achieve this, the company uses different tools and techniques. With regards to health, Coca-Cola employs a Health Risk Assessment program that provides an analysis of their health status. Based on the results, the company employs health specialists to help employees achieve this, while providing easy access to fitness and health centres across the region (Deeprose 2006, pp. 32-35).

Employee Engagement and Inclusion

The company measures this through holding dialogues with group representatives and carrying out surveys. In this case, the employees feel appreciated and valuable when they are allowed to participate in the crucial business processes, such as decision-making. The level of engagement of the employees proves how satisfied they are with their career and the company. The inclusion of all company employees follows a number of principles (Armstrong, Brown & Reilly 2011, p. 20):

  1. Education and Awareness – these entail training and other learning programs that help develop individual skills. Most employees have learnt to develop individual development plans that guide their professional growth.
  2. Accountability – this entails constant review of all business and group activities and their level of progression. The results are measured against an inclusion and diversity action plan, as well as company goals and objectives.

Most of Coca Cola’s mission and value statements are centred on employee contributions. These result from the yearly survey the company conducts globally. The aim of the survey is to seek an insight from the employees on the progress of the company and what needs to be improved. In the survey, the employees are allowed to offer ideas, as well as criticisms on the company’s management. As of 2013, the company’s engagement percentage was at 92 (Bjerndell & Severin 2013, p. 79).

Common Rewards in Coca-Cola Regions

  1. Despite the company’s location, all employees have a right to base salaries, incentive pay, and different forms of insurance and savings schemes.
  2. Based on one’s job position and grade, the employees also get fuel and food allowances, as well as important communication gadgets.
  3. The employees also get well-being, health benefits that ensure employees are in good health, and ready to work at all times (Dudovskiy 2012).

Benefits of a Reward Management System

Rewards are not only beneficial to employees, but to the company and the key shareowners. For companies like Coca-Cola, the RMS is beneficial in a number of ways. The strategy promotes flexibility, accountability, retention and constant attraction of excellence through its regions of operation. In the case of employees, the rewards ensure individual development and advancement professionally (Kaplan 2007). This not only increases the chances of promotion and job groups, but opens up opportunities for better employment in future. Additionally, the employees feel appreciated and this, in turn, results in them giving their best at the work place. The legal benefits, such as health and disability insurance are important when it comes to expenditures that may affect financial positions (Bratton & Gold 2007, p. 200). The company also benefits from this in a number of ways. For the human resource department, this eases the recruitment process.

From the rewards presented, the talented and competent employees in the market can be identified. Rewards also signal the progress of the company from different dimensions. This may be done through production, sales and ability to survive in the competitive environment. On a different case, this motivates the engagement of employees without having to incur additional costs. Despite the competitive nature in most beverage companies, rewards promote the retention of employees and other key stakeholders (Armstrong 2006).

Challenges of a Reward Management System

From a different perspective, the reward systems also pose a number of challenges for companies like Coca-Cola Australia. The application of too much motivation may send mixed signals to employees, resulting to them becoming over confident. Additionally, this may result to unhealthy competition with all employees fighting to get the available results. It may also pose a challenge for employees who give their best but fail to get the rewards due to the presence of many competent and skilled employees. In the case where everyone requires a reward, this may turn out to be expensive for the company and key shareowners (Kumar 2006).

The company should make good use of the reward system to ensure there is an increase in the production and sales. Whether financial or non-financial, the reward system must promote fairness at all levels. On a different context, it could be functional to ensure employees are in line with the organizational goals. Like in the past years, the company should continue investing in the training, learning and development programs to develop employee’s career. With such regular sessions, the company is assured of an increase in productivity. Additionally, the company should invest in human resource management, which is also important when it comes to the reward systems at Coca-Cola. The HRM helps in promoting equality, thus increasing effectiveness together with productivity. The company should be diverse, such that both financial and non-financial or tangible and intangible rewards are given to employees. In a functional context, the company must adopt this to promote employee loyalty. This also motivates employees at different levels. In different situations, the company could make use of group tasks when it comes to promoting the reward system. This is because performance is more effective at a group level, as compared to the individual level. The interaction and collaboration within groups brings out a healthy competition that ensures productivity.

Since its establishment, the company has put its focus on the well-being and health of its employees. To achieve this, it provides several competitive benefit programs that work towards addressing employees’ needs. Apart from their basic needs, the benefits and rewards given to employees are also meant to meet their life-changing needs. The company has managed to stay at the top when it comes to offering benefits due to the regular assessments. From this, the company is able to determine what would be of value to their employees and work towards providing diverse options. For Coca-Cola to succeed in this, collaboration with key sectors like the human resource department is important. With the recommendations given above, Coca-Cola will be able to attain an effective reward management system that is beneficial to the company and employees. While looking at large market share, productivity and profits, it is also important for any company to consider the well-being of its employees. Different forms of appreciation promote loyalty, which is also important when it comes to achieving organization performance. Employees are the most important factors of production, hence it is important to make them feel useful through rewards and motivation techniques.

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