Reward as Motivation

1. REWARD AS A
MOTIVATIONAL TOOL
FOR EMPLOYEES’
PERFORMANCE
ARIBABA, F. O. (PhD, FCA)
BEING A PAPER PRESENTED AT THE
2021 NULGE COOPERATIVE ANNUAL
CONFERENCE
ORGANIZED BYGLOBAL-NEC MULTI-
NATIONAL INVESTMENT LIMITED: G- NEC
BETWEEN 8TH – 9TH DECEMBER, 2021
THEME:
MANAGING COOPERATIVES AT A TIME OF
DIFFICULT CHALLENGE

2. Introduction
• Today, work environment has changed drastically in
recent time. Different management practices have
been required by the changing nature of the work
environment. However, a key and consistent
component has been the manners in which
managers drive their employees to assist reach not
only corporate goals, but also personal ambitions
• Unfortunately, most managers mistakenly feel that
delivering benefits such as better salary, bonuses,
and paid vacations would effectively encourage
their employees. One must comprehend the
concept of rewards and the extent to which it
improves employee motivation and performance at
work.
REWARDS

3. . . … Introduction
• There is a saying that “people will always
work harder when they know they will be
motivated” and literature backs it up that
about 79 percent of employees believe that
rewards motivates them to work more, and
78 percent believe that getting rewarded
makes them more productive (Caudill,
2014).
• The problem arises that if rewards
are so important in an
organisation, then why the system
is not integrated into it?
• This is a problem most employees
in Nigeria are always leaving one
organisation for another, mainly
because they are not satisfied with
the rewards system they are being
given.
• It has been observed that most
talented employees are the ones
who move out of the organisation
(Reddan, 2017).

4. Definitions
• Van-Rooy and Bussin (2014), define rewards as a
significant tool to attract, motivate and retain
employees.
• Similarly, Kwon, Hewitt and Hein (2013) agree
with this definition by stating that total reward is
a way of attracting, motivating and retaining
employees. They also suggest that companies
who apply total rewards are likely to experience a
better and string return on their investment in
their employees.
• Contrary to this, Van-Rooy and Bussin (2004) only
agrees with partial aspects of the definition,
outlining that total reward includes both financial
and non-financial rewards.
• Armstrong and Stephens
(2006), incorporates all types
of rewards, including direct
and indirect, as well as
intrinsic and extrinsic.
• Meanwhile, World at Work
(2007), a global human
resource association focuses
on compensation and
benefits, defines total
rewards as a tool that is
available to employers for the
purpose of attracting,
retaining and motivating
talented employees.

5. Concept of Rewards
Armstrong (2015) outlines that strategic rewards
are vertically integrated with the support of
business strategies, but can also be horizontally
integrated with other human resource (HR)
strategies, in order to achieve individual as well
as business needs. This view has been shared by
Kaplan (2017), who states that total rewards
portfolio should be developed in a way that
people strategy is aligned with business strategy.
Therefore, when looking at the concept of total
rewards we can identify that it aligns with
strategic rewards
Giancola (2016) explains that total
rewards concept model consists of
five elements of rewards including
compensation, benefits, work-life
balance, performance recognition
and development and career
opportunities. These elements
signify the tool kit as mentioned
before that an organization selects
to offer for which is aligned with
the value proposition that creates
value for both the employee and
the organization

6. Benefits of
Rewards
system
• Enhancing the employment relationship: The
employment relationship created by total rewards
approach must contain both aspects of transactional
and relational rewards in order for a reward to appeal
more to individuals.
• Attraction and retention: This illustrates that relational
rewards help to convey a positive psychological
contract. The organization can turn into an “employer
of choice” and "an incredible work environment", thus
attracting and retaining the talented individuals it
requires.
• Flexibility to meet individual’s needs: “Relational
rewards may bind individuals more strongly to the
organization because they can answer those special
individual needs”.
• Greater impact: the mutual effect of the different types
of rewards will make a profound and longer- enduring
impact on the motivation and commitment of
individuals

7. Rewards, Motivation and
Employees Performance
• Studies conducted by (Mullins, 2007; Hit at
al, 2009; Armstrong & Stephens, 2006;
Brown, Callen & Robinson, 2016; and Ryan
& Deci, 2000) note that in order to obtain
a better understanding of motivation, one
must recognize the distinction between
the two types of motivation, which has
been considerably explored in relation to
total rewards: Intrinsic and extrinsic
• Research shows that individuals
who get tremendous rewards
obtain satisfaction. However,
reward sum shifts depending
upon achievements, so small
rewards offered to poorly
performing employees will lead to
dissatisfaction.
• Managers should note that
performance and satisfaction are
influenced by the allocation of
rewards, hence why they should
be considered as two separate but
related labor results

8. Intrinsic Versus Extrinsic Rewards
Intrinsic rewards are internal to the individual and are in
many ways less tangible. In fact, they are highly subjective,
in that they represent how the individual perceives and
feels about work and its value. Malhotra et al (2007) argue
that ‘intrinsic rewards are inherent in the content of the
job itself’ and include ‘motivational characteristics such as
skill variety, autonomy and feedback’ as well as employee
participation in decision making and role clarity.
• Manion (2005) also notes that there are five types of
extrinsic rewards which can be summarized as healthy
relationship, meaningful work, competence, progress, and
choice. extrinsic rewards are ‘a host of external things that
managers can provide that may serve as incentives for
employees to increase productivity. These include money,
benefits, bonuses, promotions, flexible schedules etc.

9. Reward and Employee
satisfaction
• The ability of managers to obtain employee
satisfaction with rewards is a complex process.
Indeed, it is a function of several related factors
which any manager who intends to achieve it
must critically study to be able to positively
implement.
• Each employee satisfaction with rewards is
intrinsically related to what he or she expects from
the organization and what is actually received.
Feelings of satisfaction or dissatisfaction occur
when employees compare their inputs such as
education, job skills, and effort to the mixture of
intrinsic and extrinsic rewards which they receive
from their organizations.
• Employee satisfaction or
dissatisfaction is also
influenced by comparisons
they make with other people
in similar job positions and
organizations
• Employee satisfaction results
from a mixture of rewards
other than any one particular
reward (Shanks 2007, Bessell
et al. 2002, Drake et al, 2007).

10. Employee Rewards Make
Happier Employees
• The fact that most employers want their
employees to be happy and productive,
then happy employees contributes to
higher morale.
• When morale is high, turnover is low, and
the business has a greater chance of being
successful and hitting revenue targets.
Studies indicate that when employees are
happy, they are at least 12 percent more
productive
• There is a direct correlation between
rewards and employee performance,
with 86 percent of employees saying that
they feel happier and prouder when they
are recognized at work, and 85 percent
saying that they felt more satisfied with
their jobs.
• A large number of about 70 percent of
workers also noted when they were
happy at work, they were happier at
home as well. Satisfaction at home is
important because it has a significant
impact on employees' ability to do their
jobs well and avoid issues with
presenteeism, or not working to full
capacity when they are at work.

11. ….. Rewards Versus Productivity
• Motivated and happy employees also
contribute to the bottom line and the
difference is significant.
• Companies with engaged employees
have higher revenues than those that
don’t, to the tune of two-and-a-half to
three times greater.
• Profitability also increases
with employee engagement,
with those companies
boasting engaged employees
seeing almost one-third
higher profitability.
• Clearly, there is a return on
investment that's inherent in
keeping employees satisfied
with their work.

12. Employee Recognition
Increases Trust
• Beyond keeping employees happy, though,
which is the key to motivation, employee
recognition also increases trust in the
workplace.
• Studies revealed that about 90 percent of
employees who had received some sort of
recognition for their work in the previous
month have higher levels of trust in their
boss, while fewer than half of those who
hadn’t been recognized said they trust
their boss.
• People want to know that
their efforts are making a
difference and aren’t
going unnoticed by high-
ups.
• Rewarding and
recognizing employees
creates stronger
relationships, which in
turn spurs motivation for
employee performance.

13. Rewards Motivate Employees
Better Than Punishment
• If rewards are such powerful motivators,
it would seem to follow that
punishment, or the threat of
punishment, could be just as powerful.
After all, no one wants to experience
pain, whether it is actual physical pain or
the psychological pain that comes from
being humiliated, demoted or even fired.
When it comes to motivating
employees to act, rewards are far more
effective than punishments.
• On the other hand, when
trying to get employees not to
do something, such as using
company resources for
personal activities, the threat
of punishment is actually more
effective. This is due to the
levels of dopamine, a so-called
“happy hormone,” in the brain
associated with the specific
activities.

14. When Reward is Ineffecitive
Many employee rewards programs focus on
the wrong things, and don’t get to the heart
of what really keeps people moving
forward.
In many companies, employee recognition
and reward programs are focused on a major
event, usually held quarterly or annually, in
which individuals are recognized for their
achievement, often with a plaque or trophy
and a bonus check.
Although employees
appreciate being recognized
for their contributions,
companies rarely see major
increases in engagement after
these events, and most
employees aren’t focused on
pursuing those awards as they
go about their days.

15. Rewards are
Powerful
Motivators
• The problem with such reward and recognition programs
is that they fail to get to the heart of what really motivates
people.
• Money is certainly a powerful motivator for many people,
but once the bonus check has been spent, few people
continue to correlate that cash with what they did to earn
it.
• Rewards are effective not because of what the actual
recognition consists of, but because of how they make
people feel.
• Getting praised for your work creates a feeling that what
you are doing is valuable and has meaning and that you
are respected by your managers and peers. Everyone
wants to feel good about their work and what they are
doing, and a well-designed rewards program helps
accomplish that.

16. Designing the
Perfect Rewards
Program
• With reward and recognition serving such an important role in
employee motivation, it’s imperative that employers get it right.
• Rewards only work when they are meaningful and address the
needs of the recipient. This means recognizing the internal and
external factors at play in motivation and how they influence
the effect of the rewards being given.
• Addressing internal factors is most important when designing
a motivation system. Everyone wants to be recognized for their
accomplishments, but they also want autonomy and increasing
responsibility; this gives a sense that they are contributing value
to the organization.
• External factors, such as bonuses, pay increases, free meals,
parking spots and other perks are always appreciated, but rather
than truly motivating people, they are more effective at
preventing dissatisfaction. In other words, a nicer office space
with a window will make the workday more pleasant, but it’s
unlikely to drive you to work harder like a promotion would.

17. Conclusion
• It is apparent that organizations are different,
therefore, total rewards programmes must be applied
in a way that individual needs are met.
• Also, because one generic total reward system cannot
be used for each industry or organisation, as they all
have different needs, so each programme should be
adapted to the individual need of the organisation.
• This should also be aligned with the business and HR
practices while fulfilling organization goals.
• Theoretically, total rewards are regarded as a vital
practice and will continue to have an effect on
improving organizations and their resource in the
future. In this sense, an effective reward system will
give significant impact on employee performance
while the employer takes full advantage of employees
in developing a positive workplace.

18. Conclusion
• It has been advocated that extrinsic rewards may erode
intrinsic interest and that working for just money may
inhibit motivation or pleasurable condition. It is said that
the more highly rewarded organizations make their
employees feel, then the more fulfilled they tend to
become in general and not just in their workplace.
• Furthermore, an issue that has occurred is that not all
organizations know that a rewards framework is vital. An
organization needs to understand that in order to retain
their employees and gain value for the organization they
must implement an appropriate total reward strategy.
Many employees within an organization find it difficult to
get the correct work life balance, therefore organization
need to guarantee that they are giving their workers the
help that they require.
• It must also be acknowledged that employee motivation is
not limited to financial incentives. Employees can be
further motivated by the way in which they are treated by
their employers, as this can have an influence on their
jobs.

19. Thank you all for
paying attention.