Introduction
Managers should realize that employees choose to perform the way they do because of some internal or external motivation. To ensure greater participation, managers must understand this simple motivational principle. Employee motivation can be greatly enhanced when managers understand the seven assumptions that underlie change behavior (Boughton, Gilley & Maycunich1999). First, employees are motivated to change their behavior when given clear, sharply focused objectives. Second, employees need to thoroughly understand how to perform their jobs correctly. Third, employees are more likely to change their performance behaviors when they are given opportunities to participate in problem solving and decision-making activities that directly affect them Fourth, change requires personal commitment for action, which obligates managers to secure employee buy-in prior to the creation of growth and development plans (Boughton, Gilley & Maycunich1999). Fifth, managers must clearly communicate positive and negative rewards that are linked directly to performance improvement. Sixth, managers must demonstrate patient, persistent follow-through when providing positive feedback and reinforcement. Seventh, managers need to be realistic regarding the types of rewards offered, while acting within their discretion and authority. To motivate employees, companies should first know the behaviors of employees and why it changes. By doing this companies can know how to approach a certain employees and what motivational strategy can be used towards them. To motivate the personnel rewards are given to them.
Rewards
Rewards can be defined as something verbal or tangible. Verbal rewards have generally been found to increase measures of intrinsic motivation. According to cognitive evaluation theory, all rewards are experienced as controlling by individuals, but verbal rewards provide an informational function that overrides the feelings of control. Rewards classified as tangible include money, candy, gold stars, good player awards, theater tickets, opportunities to engage in preferred activities, and so on (Cameron & Pierce 2002). Rewards that are promised to participants are referred to as expected rewards; unexpected rewards are those delivered at the end of the experimental session but not promised beforehand. Expected tangible rewards were found to produce a negative effect on the free-time measure of intrinsic motivation; unexpected reward had no impact. Unexpected rewards do not affect feelings of competence, self-determination, or locus of control because the controlling process only takes place when the rewards are in progress. With unexpected rewards, individuals do not know that they will receive a reward, and thus, intrinsic motivation will not be affected (Cameron & Pierce 2002).
Non-competency-contingent rewards are those given for merely doing, completing, or repeating an activity and are most likely to reduce intrinsic interest. From the perspective of social learning theory, in this kind of loose reward procedure, the rewards do not convey competency to an individual. In a loose contingency, the rewards are given without regard to quality of performance, and as such, they exert a weak influence over behavior. Thus, other factors are expected to moderate the effects of loose or non-competency-contingent rewards, including the level of initial task interest, ability on the task, value of the rewards, type of task, age of the participants, and when and how intrinsic motivation is measured (Druker & White 2000). Competency-contingent rewards, on the other hand involve rewards given for mastery. This type of reward contingency is said to develop perceptions of self-efficacy and task interest. Rewards given for achieving challenging standards are also indicative of competence (Druker & White 2000). Several other variables have been hypothesized to affect the impact of rewards on measures of intrinsic motivation. Researchers have investigated the effects of reward magnitude, whether the rewards are attractive to participants, whether the rewards are endogenous or exogenous to an activity, whether there are norms about payment and whether participants are told prior to the measurement of intrinsic motivation that reward is no longer available Druker & White 2000). Rewards are given by organizations to employees they deem as deserving of it. Rewards can come in different forms. Rewards can be in the form of verbal gifts to employees. It can also be in the form of physical gifts such as monetary incentives. Rewards can create various changes to an organization and it can help in improving the performance of employees. Rewards lift up the spirits of the employees for them to change their performance, Rewards also challenges the employees for them to perform better. They want to attain rewards and that is the reason why the employees’ performance changes.
Reward Strategy
Most reward policies and systems aim to reward people for delivery and results, against specific measures or objectives. Some also pay due recognition to effort put into striving for results and so acknowledge the factors outside an individual. In conditions of planned change, what should be specifically rewarded are ideas and actions that significantly further transformation, add notable value to changes and facilitate the introduction, or pace, of change. In other words, the reward systems need to recognize tangibly those mindsets and behaviors which demonstrably support the change processes (Williams 2005). Reward strategy seeks to recognize and underpin outstanding contributions to the implementation and consolidation of prescribed change, within the organization. Reward strategy seeks to recognize and underpin outstanding contributions to the implementation and consolidation of prescribed change, within the organization. Talented high performers are elite, but they are an organization’s elite off competence and what is being given special recognition is intellectual distinction, or outstanding ability not some form of social elitism. Most successful businesses operate as meritocracies and, in such environments; there is nothing as unequal as the equal distribution of recognition and reward, between the outstanding and the poor performers (Williams 2005).
At strategic levels of management and leadership, the risks and rewards are both potentially far greater and usually more long-lasting, than they are within operational orbits (Williams 2005).Reward planning and management requires organizations to consider four key issues: determining the value of jobs; establishing a pay structure; building a link with performance; and communication and administration. One of the most neglected aspects of this process in businesses is determining the value of jobs and relates to the lack of initial Human Resource planning and job analysis characteristics of businesses. Determining the value of jobs entails evaluating a job from job analysis, considering compensable factors, designing a system for evaluation and determining who will do the evaluation. Employees need some acknowledgement of their accomplishments and validation of task accomplishment is a strong predictor of employee satisfaction. Hence, performance appraisal also has an important link to rewards, particularly where performance-related pay and promotion are offered (Beaver & Stewart 2004).Building a link between pay and performance needs to involve the development of outcomes to be sought and may entail performance-based pay systems, merit pay plans, individual incentive plans, and managerial incentive plans. The management and administration of a reward system also has the potential to be a significant form of employee communication. The rewards are clear indications of human resource values, goals and priorities of the organization (Beaver & Stewart 2004). Reward strategy focuses on determining the best reward systems that fit an organization. To devise a reward strategy one must consider first the financial capacities of the organization. An organization needs to determine whether the firm can afford financial rewards. Another consideration on the reward strategy is the level of performance an employee has shown.
Financial Rewards
Money is a key incentive for the majority of people. Although it is difficult to ensure that the financial reward an individual receives is fair effort must be applied in trying to get it right. If there is a lack of fairness this will lead very quickly to a lack of motivation and low morale. Also, if monetary rewards are too low they will be seen by workers as insulting and will lead to less effort being put into the job (Adair 2004). Everybody is receptive to positive recognition. Financial reward is seen by the recipient as a tangible form of recognition. There are other ways whereby appreciation is expressed for what has been contributed. If recognition is not given, an individual can feel unnoticed, unvalued and unrewarded. This leads to a drop in motivation and energy levels. The power of recognition as a motivator should not be underestimated (Adair 2004). Performance appraisal is the periodic assessment of how well an individual or a team is carrying out the duties and responsibilities of a job. Its primary purpose as far as compensation management is concerned is to recognize and reward the individual for accomplishments in the job: The higher the level of accomplishment, the greater the amount of financial reward given (Caruth & Handlogten 2001).
Any compensation system should adhere to the principle pay the job and reward the individual. Job pricing accomplishes the former and performance appraisal accomplishes the latter. Performance appraisal, if properly developed, has many organizational uses other than simply awarding pay increases. For example, it can be used to heighten communication between supervisor and employee, to enhance employee motivation through feedback on progress, to identify individuals with the potential for promotion to positions of greater responsibility, to uncover training needs, or to validate the process by which employees are selected. Incentive compensation is any financial reward given to an employee for accomplishing specific results of a quantitative or qualitative nature (Caruth & Handlogten 2001). In a much narrower sense, incentive compensation is pay based on output. Incentives provide for variable rewards dependent upon results accomplished, amount of work produced, or measurable performance. At one extreme of the incentive spectrum, compensation is determined solely by the level of output: no output, no compensation. At the other extreme, a base level of compensation is assured and additional financial rewards are given for exceeding stipulated expectations: a guaranteed salary, plus a performance bonus. Incentive compensation may be paid on the basis of individual effort or group effort. Incentive schemes may be used at the employee level of the organization or the top-management level (Caruth & Handlogten 2001). Financial Rewards are given to boost the morale of the personnel and award them for good production levels. Financial rewards need to have reasonable values so that the company will not incur higher expenses. It needs to have reasonable values so that personnel will not be insulted. It can be in the form of cash or non cash rewards. Cash rewards come in the form of financial gifts that may or may not be received immediately by the personnel. Non cash rewards come in the form of gift cards, gift certificates or travel benefits.
Non financial rewards
From the employee’s perspective, appraisal may affect their performance, or their promotion prospects. At a deeper level, it may impact upon their self-esteem. From the employer’s perspective, appraisal is primarily a tool for performance management; the motivation of good performance by reward and its improvement by the identification of training needs (Herriot 2001). Considerable effort has been put into making appraisal fair. The accuracy and reliability of appraisal ratings has been addressed by such means as behaviorally-anchored rating scales, which are supposed to force the appraiser to recall specific behavior which they have observed rather than rely on general impressions. Yet research demonstrates that there is still considerable variability in ratings of the same person, and that this is due to differences between appraisers (Herriot 2001). A manager may link the agreements about future performance that he makes with the professional to other subjects. This may create a form of reward for the professional if he complies with the agreements (De Bruijn 2002).
Performance may result in a higher allocation of funds, extra facilities or a more important role for the professional in establishing the strategy of the organization. Of course, negative sanctions are also possible in the event of non-performance. Monetary compensation alone will not guarantee high levels of team performance. Other types of rewards must also be used. Studies indicate that employees find personal recognition more motivating than money. Management theorists in general agree that money is not all that employees, either as individuals or members of a team, desire in a working relationship. When rewarding individuals or teams there are a number of other non monetary ways that may be used to reward individuals or teams effort: Plaques, trophies, gifts, meals, and communications of appreciation during organizational meetings or through company wide bulletins represent a few of these ways (De Bruijn 2002). Whatever means of appreciation are used; they must be sincere expressions of management recognition. Time spent investigating individual wants, needs, and backgrounds of team members may also help in selecting the most meaningful form of recognition. The timing of rewards is also important. To be effective, rewards must be given as soon as possible after the behavior that earned them. If rewards are given months after the behavior that earned them, an individual or a team may see little or no connection between behavior and reward; consequently, any chance to reinforce positive team behavior may be lost. For greatest psychological impact, the individual or team should be informed of any rewards it is to receive before public recognition is given. To do otherwise may detract from the impact of the reward (De Bruijn 2002). Non financial rewards can be in form of and communications or messages of appreciation, Plaques, trophies, gifts and free meals. The goal of non financial rewards is to show to an individual or group of personnel that their good performance has been noticed by the firm and the firm thanks them for performing well. Unlike financial rewards, non financial rewards need to be given within a few days after someone or a group performs well so that they can truly feel the reason for the non financial reward.
Conclusion
Rewards are given by organizations to employees they deem as deserving of it. Rewards can create various changes to an organization and it can help in improving the performance of employees. Non financial rewards show to an individual or group of personnel that their good performance has been noticed by the firm and the firm thanks them for performing well. The non financial rewards provide an alternative action in a firm’s reward strategy. The non financial reward serves as another choice aside from financial reward. It has lesser cost and can create a better relationship between a firm and the personnel.
References
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Credit:ivythesis.typepad.com
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