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Business, employee and reward are elements that are interrelated and complementary. For a business that is successful, it requires a dedicated employee. To get dedicated employees, they need motivation and encouragement. Rewards are powerful tools of motivation and performance improvement in employees. Rewards can be two types which are monetary and non-monetary. Monetary reward is tangible and usually direct cost associated to them such as cash bonuses, allowances, gift and etc. Non-monetary is less tangible but it’s still quite effective and may include informal and formal acknowledgement of an employee and his work, more enjoyable job assignments, different training opportunities etc.
The primary goal of rewards as defined by Jack Zigon is “something that increases the frequency of an employee action” [1998]. Allen and Helms say that, “rewards systems should be closely aligned to organizational strategies, to achieve desired goals” [2002]. Keller suggests that “people are motivated to higher levels of job performance by positive recognition from their managers and peers”. Monetary and non-monetary reward are equally important to reward employees. It is because not everyone can be motivated with financial reward. Some of them see non-monetary rewards such as being thanked at a department function, having lunch with the head or getting an extra day off as a creative idea for motivation. |
There are a number of advantages of employee rewards for both employee and employer:
Employee advantages
• Peace of mind
• Better productivity because of the intention of reward
• Pride in company and work
• Employees enjoy work more because of appreciation
Employer advantages
• Employee rewards help to retain qualified and trained employees
• Eases companies’ financial burden
• Improves productivity and efficiency
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The incentive theory of Motivation
Any rewards intangible or tangible is presented after an action occurs (behaviour) with the intent to cause the action again. If the reward is received by the person doing the action immediately then the effect would be greater as opposed to receiving it later when the effect might not be as pronounced. If the action-reward combination is repeated several times then the action becomes a habit and the reward does not associate a positive outcome of motivation. To apply proper motivation techniques is much harder than it seems on paper. According to Steven Kerr, “when creating a reward system, it can be easy to reward B, while hoping for C and in the process of it all, harvest harmful effects that may jeopardize future objectives and goals.”
How important is money?
In every sector, each person works with the intention of earning money. Peter Drucker suggests that “there is not one shred of evidence for the alleged turning away from material rewards. Anti-materialism is a myth, no matter how much it is extolled. In fact, they are taken so much for granted that their denial may act as a de-motivator. Economic incentives are becoming rights rather than rewards”. It is not just in the business world that employee rewards exist, but also in other sectors such as sports etc. Strikes for better salaries and rewards still occur regularly at some place whether in the service or manufacturing sector. Everyone is looking for better rewards and opportunities. Employees are fighting to achieve all this despite the psychologist’s claims that security is the prime need of any person. Keller said “Self-motivation can go only so far and it needs to be constantly reinforced by rewards. In particular, merit must be measured and rewarded regularly, if it is to be encouraged and sustained”. |
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