Employee Rewarding

Rewarding Employee Performance

The Role of Employee Performance in an Organisation

Recognizing and incentivizing employees for their strong performance is crucial for fostering motivation and retaining valuable skills. By acknowledging their contributions, employees are more inclined to develop loyalty and enhance their productivity, ultimately leading to heightened overall organizational output(Francis, Zirra and Charles, 2020).

Performance Based Rewards

Source: (Sanders et al., 2018)

How can Rewards Improve Performance?

Incentives impact behaviour by inspiring individuals to acquire fresh skills or attain objectives. Once a reward is provided, the recipient becomes motivated to exert increased effort and enhance their performance beyond previous levels(Ghorbani, Abdollahi and Mondanipour, 2013).

 Benefits of Rewarding Employees for Good Performances

Making the employee feel valued in working for a particular organisation	Rewarding employee performance communicates a sense of appreciation and recognition for their contributions within a specific organization.
Fuelling efficient work	Rewards for performance act as catalysts, igniting a drive within employees to work more efficiently.
Improving the employee productivity	By tying rewards to exemplary performance, employees are inspired to elevate their productivity levels.
Increasing the commitment towards job performance	stewarding performance cultivates a heightened commitment to job-related tasks
Improving job satisfaction	The act of recognizing and rewarding employee achievements contributes to overall job satisfaction.

Source: (Noorazem, Sabri and Nazir, 2021)

 Disadvantages of Performance-based Rewards

· Potential for encouraging unethical conduct exists- Rewarding employees solely based on outcomes can create a situation where some employees might resort to unethical behaviour to achieve those outcomes.

·  When individuals receive rewards, they may come to anticipate them each time they excel in their job. If these rewards are absent for a year, it could lead to discontentment.

· Some employees might be seen as treated unfairly, perceiving unequal recognition or compensation for their dedication and input.- Reward systems can sometimes result in inequities, where certain employees feel that their efforts are not being fairly recognized or rewarded compared to their colleagues. This perception of unfair treatment can lead to resentment and demotivation(Manzoor, Wei and Asif, 2021).

Conclusion

Balancing rewards is crucial in an organisation. While they motivate, they also risk unethical behaviour, breed entitlement, and create perceptions of unfairness. A well-designed system should foster ethical conduct, manage expectations, and ensure equitable recognition, promoting a motivated and harmonious workforce.

References

Francis, F., Zirra, C.T.O. and Charles J., M.I. (2020). Reward System as a Strategy to Enhance Employees Performance in an Organization. Archives of Business Research, [online] 8(6), pp.156–164. doi:https://doi.org/10.14738/abr.86.8403.

Ghorbani, D.H., Abdollahi, D.S.M. and Mondanipour, I.N. (2013). An Empirical Study on the Impacts of Market Orientation and Innovation on New Product Success (Case Study: Food Manufacturers in Isfahan, Iran). International Journal of Academic Research in Business and Social Sciences, [online] 3(9), pp.315–326. Available at: https://hrmars.com/index.php/IJARBSS/article/view/214/An-Empirical-Study-on-the-Impacts-of-Market-Orientation-and-Innovation-on-New-Product-Success-Case-Study-Food-Manufacturers-in-Isfahan-Iran [Accessed 15 Apr. 2023].

Manzoor, F., Wei, L. and Asif, M. (2021). Intrinsic rewards and employee’s performance with the mediating mechanism of employee’s motivation. Frontiers in Psychology, [online] 12(12). doi:https://doi.org/10.3389/fpsyg.2021.563070.

Noorazem, N.A., Md Sabri, S. and Mat Nazir, E.N. (2021). The Effects of Reward System on Employee Performance. Jurnal Intelek, [online] 16(1), pp.40–51. doi:https://doi.org/10.24191/ji.v16i1.362.

Sanders, K., Jorgensen, F., Shipton, H., Van Rossenberg, Y., Cunha, R., Li, X., Rodrigues, R., Wong, S.I. and Dysvik, A. (2018). Performance-based rewards and innovative behaviors. Human Resource Management, 57(6), pp.1455–1468. doi:https://doi.org/10.1002/hrm.21918.