The document discusses the relationship between employee reward systems and organizational performance. It defines reward systems and divides them into intrinsic and extrinsic rewards. It examines theories like Vroom's expectancy theory and Maslow's hierarchy of needs to explain how reward systems can motivate employees. While motivation is important for performance, accurately evaluating performance is difficult. Statistical evidence suggests many performance appraisal systems decrease rather than increase motivation and productivity. However, when reward systems are properly designed and linked to goals, they have the potential to improve motivation and organizational performance by fulfilling employees' various needs.
A comprehensive study of Employee Engagement: Contemplating 7-D model in view...IJAEMSJORNAL
The study has been initiated to unfold the conceptual reality of a commonly used terminology in organization behavior study- employee engagement. The engagement of employees towards an organization is determined by their affective, cognitive and behavioural attributes which are in turn linked with various internal and external factors. These factors are identified and presented in various models with specific focus areas. The employee engagement index, the measuring indicator, is a reflection of multiple self-determining factors. This study unveiled the factors while analyzing the annual reports for FY 2018-19 of NIFTY 50 companies. The key focus areas have been identified and an all-encompassing 7-Dimensional model has been proposed to determine the objective-oriented factors to prepare relevant questionnaires for ascertaining Employee Engagement Index.
A comprehensive study of Employee Engagement: Contemplating 7-D model in view...IJAEMSJORNAL
The study has been initiated to unfold the conceptual reality of a commonly used terminology in organization behavior study- employee engagement. The engagement of employees towards an organization is determined by their affective, cognitive and behavioural attributes which are in turn linked with various internal and external factors. These factors are identified and presented in various models with specific focus areas. The employee engagement index, the measuring indicator, is a reflection of multiple self-determining factors. This study unveiled the factors while analyzing the annual reports for FY 2018-19 of NIFTY 50 companies. The key focus areas have been identified and an all-encompassing 7-Dimensional model has been proposed to determine the objective-oriented factors to prepare relevant questionnaires for ascertaining Employee Engagement Index.
Impact of Extrinsic Rewards on Job Satisfaction of Banking Sector Employees o...iosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
Compensation Practices On Employee Motivation As Impact On Arya Systemsjournal ijrtem
ABSTRACT : In this changing scenario compensating the employees according to the performance and which motivates them is the priority and right of employees. There is a strong link between compensation practices and employee motivation. The paper is an effort to determine the relationship between compensation practices and employee motivation in Arya Systems. The variables which have impact on employee motivation are wages & salary, working hours and promotion system. The objective of this research paper is to analyze compensation practices practices required to retain employees and maintain them. The main aim of this Research paper is to study compensation practices and related aspects and to know the impact of compensation practices on employee motivation in Arya systems. The research paper makes use of structured questionnaire administered to the selected respondents for data collection has been done. The results revealed that there is positive relationship between compensation practices and employee motivation. The rank analysis showed that the factor which contributes more to the employee motivation is job security of employees whereas promotion system results in more satisfaction.
A STUDY ON ORGANIZATION COMMITMENT AND JOB SATISFACTION IN SELECTED BUSINESS ...IAEME Publication
The purpose of this study is to analyze the relationship between job satisfaction and organizational commitment. Employees’ productivity is largely related to their level of job satisfaction and in fact, the turnover rate can be reduced with a higher level of organizational commitment. Therefore, it is important for an organization to study the relationships between these two variables. The database was collected from the organization through a well-structured questionnaire. The questionnaire consists of personal data, Questions related to the dimension organization commitment and job satisfaction in Selected BPOs in Tiruchirappalli. Hence the sample size for the study is 110 respondents by adopting Purposive sampling technique.
The following paper represents an in-depth analysis of the causality between motivation and performance of human resources, in organizational contexts. By analyzing the complexity of the two concepts individually, followed by the correlations between the two, the current paper will prove the bidirectionality of this relationship: motivation and performance determining each. Such a proven relationship will bring significant added value to the organizations that are interested to enrich their Human Resources practices, allowing them to strategically plan and target their actions in a manner that will ensure high level of involvement, engagement and active participation of their people. The study becomes both a theoretical and practical foundation of strategic HR management, in terms of how can motivation and performance be instrumented in order to align the individual efforts to the organizational strategy. In terms of methodology, the paper approaches a qualitative method, starting by identifying the elements that determine motivation and the ones that determine performance, including the way they can determine one another. Current paper is therefore an initial study, that could then be valued in further quantitative studies that would collect and interpret statistical data to demonstrate the theoretical hypothesis and model proposed.
Investigating the influence of service training reward system and empowerment...csandit
The current study focuses on the investigation of the relationship between variables training,
reward, empowerment and job satisfaction of the employees and the influence of job satisfaction
on the organizational commitment. In so doing, the relationship between super pattern variables
was considered on the basis of some theoretical principles. This is a correlative study in which
the path analysis model is used, because it is possible to investigate direct and indirect paths
through such model. Population included all employees of Ilam’s telecommunications company
among whom 190 ones were selected as the sample by use of randomized sampling model. Data
was gathered using five standard questionnaires. The reliability and admissibility of the
questionnaires was evaluated by use of Coronbach’s and explorative factor analysis. In order
to test the available pattern, the path analysis technique was used. Results show that there is a
meaningful relationship between the above mentioned variables.
An empirical review of Motivation as a Constituent to Employees' Retentioninventy
This study investigated the link between motivation and retention and the effect of motivation on retention at different organisational levels. The research linked motivation and high job satisfaction to explore strategies that help in employees' retention and why public sector employees leave with particular reference to Federal Medical Centre (FMC) Owerri. This was achieved by collecting primary data from Federal Medical Centre (FMC) on non-clinical staff/employees (managers and non-managers and secondary data from published materials and the hospital's human resources (HR) data. The findings were tested using employee motivational attributes to prove that motivation plays a crucial role in enhancing employee retention. Motivation was found to be a core factor that determines the level of employee retention among managers and non-managers within the case study organisation. Specifically, it was found out that employees tend to be motivated if they are subjected to performance-based compensation, recognition for good work, and encouraged to pursue individually fulfilling tasks.
Employee Englightnment Sulphey and BasheerM M Sulphey
an enlightened employee is capable of radiating a positive energy among his peers and colleagues. He creates not only a better surrounding by keeping his actions at par with his words, but also better humans of tomorrow not just limiting to commitment or engagement.
Reward System and Level of Staff Satisfaction among NonAcademic Staff of Sele...AJHSSR Journal
In any profit-oriented workplace, job relationship is seen as a trade procedure where workers
give inputs in terms of skills and expertise for the different rewards, compensations and incentives from their
employer which go far in deciding their satisfaction, performance and productivity. This study sought to
examine the level of staff satisfaction with the reward system implemented by three (3) selected tertiary
institutions in Enugu State, Nigeria. Survey design was adopted for this study. The population of the study was
1122 staff drawn from the non-academic staff of the selected higher institutions in Enugu State, Nigeria. A
sample size of 415 was obtained using Taro Yamane‟s (1964) formula for finite population. Four hundred and
fifteen (415) questionnaires were used to collect data from respondents who were non-academic staff members,
after being validated by experts in academia and human resources management. Burley‟s proportional
allocation was used to calculate proportionate sample size. Out of 415 copies administered, three hundred and
one (301) copies were returned and used for the analysis. Data were collected through primary and secondary
sources. Cronbach‟s Alpha was used to test for the reliability of the instrument, an Alpha of 0.79 was obtained
thus confirming the reliability of the instrument. The hypotheses formulated were tested using Z test. Findings
from the study revealed that the level of staff satisfaction with the reward system implemented by the tertiary
institutions is low (computed z-value of 24.385 against 1.645 and significance of 0.000) (z = 24.385> at p<
0.05) during the period studied. Based on the finding, the study concludes that the reward system implemented
have a very strong correlation with the satisfaction of non-academic staff in the institutions of higher learning
studied. In the light of the forgoing therefore, it was recommended that the reward systems implemented by the
institutions should be consistent with staff needs and relevant to the personal life of the employee. Also, the
reward system implemented should be reviewed at various levels to earn the employees‟ commitment and
satisfaction.
Research Inventy : International Journal of Engineering and Scienceinventy
Research Inventy : International Journal of Engineering and Science is published by the group of young academic and industrial researchers with 12 Issues per year. It is an online as well as print version open access journal that provides rapid publication (monthly) of articles in all areas of the subject such as: civil, mechanical, chemical, electronic and computer engineering as well as production and information technology. The Journal welcomes the submission of manuscripts that meet the general criteria of significance and scientific excellence. Papers will be published by rapid process within 20 days after acceptance and peer review process takes only 7 days. All articles published in Research Inventy will be peer-reviewed.
Impact of Extrinsic Rewards on Job Satisfaction of Banking Sector Employees o...iosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
Compensation Practices On Employee Motivation As Impact On Arya Systemsjournal ijrtem
ABSTRACT : In this changing scenario compensating the employees according to the performance and which motivates them is the priority and right of employees. There is a strong link between compensation practices and employee motivation. The paper is an effort to determine the relationship between compensation practices and employee motivation in Arya Systems. The variables which have impact on employee motivation are wages & salary, working hours and promotion system. The objective of this research paper is to analyze compensation practices practices required to retain employees and maintain them. The main aim of this Research paper is to study compensation practices and related aspects and to know the impact of compensation practices on employee motivation in Arya systems. The research paper makes use of structured questionnaire administered to the selected respondents for data collection has been done. The results revealed that there is positive relationship between compensation practices and employee motivation. The rank analysis showed that the factor which contributes more to the employee motivation is job security of employees whereas promotion system results in more satisfaction.
A STUDY ON ORGANIZATION COMMITMENT AND JOB SATISFACTION IN SELECTED BUSINESS ...IAEME Publication
The purpose of this study is to analyze the relationship between job satisfaction and organizational commitment. Employees’ productivity is largely related to their level of job satisfaction and in fact, the turnover rate can be reduced with a higher level of organizational commitment. Therefore, it is important for an organization to study the relationships between these two variables. The database was collected from the organization through a well-structured questionnaire. The questionnaire consists of personal data, Questions related to the dimension organization commitment and job satisfaction in Selected BPOs in Tiruchirappalli. Hence the sample size for the study is 110 respondents by adopting Purposive sampling technique.
The following paper represents an in-depth analysis of the causality between motivation and performance of human resources, in organizational contexts. By analyzing the complexity of the two concepts individually, followed by the correlations between the two, the current paper will prove the bidirectionality of this relationship: motivation and performance determining each. Such a proven relationship will bring significant added value to the organizations that are interested to enrich their Human Resources practices, allowing them to strategically plan and target their actions in a manner that will ensure high level of involvement, engagement and active participation of their people. The study becomes both a theoretical and practical foundation of strategic HR management, in terms of how can motivation and performance be instrumented in order to align the individual efforts to the organizational strategy. In terms of methodology, the paper approaches a qualitative method, starting by identifying the elements that determine motivation and the ones that determine performance, including the way they can determine one another. Current paper is therefore an initial study, that could then be valued in further quantitative studies that would collect and interpret statistical data to demonstrate the theoretical hypothesis and model proposed.
Investigating the influence of service training reward system and empowerment...csandit
The current study focuses on the investigation of the relationship between variables training,
reward, empowerment and job satisfaction of the employees and the influence of job satisfaction
on the organizational commitment. In so doing, the relationship between super pattern variables
was considered on the basis of some theoretical principles. This is a correlative study in which
the path analysis model is used, because it is possible to investigate direct and indirect paths
through such model. Population included all employees of Ilam’s telecommunications company
among whom 190 ones were selected as the sample by use of randomized sampling model. Data
was gathered using five standard questionnaires. The reliability and admissibility of the
questionnaires was evaluated by use of Coronbach’s and explorative factor analysis. In order
to test the available pattern, the path analysis technique was used. Results show that there is a
meaningful relationship between the above mentioned variables.
An empirical review of Motivation as a Constituent to Employees' Retentioninventy
This study investigated the link between motivation and retention and the effect of motivation on retention at different organisational levels. The research linked motivation and high job satisfaction to explore strategies that help in employees' retention and why public sector employees leave with particular reference to Federal Medical Centre (FMC) Owerri. This was achieved by collecting primary data from Federal Medical Centre (FMC) on non-clinical staff/employees (managers and non-managers and secondary data from published materials and the hospital's human resources (HR) data. The findings were tested using employee motivational attributes to prove that motivation plays a crucial role in enhancing employee retention. Motivation was found to be a core factor that determines the level of employee retention among managers and non-managers within the case study organisation. Specifically, it was found out that employees tend to be motivated if they are subjected to performance-based compensation, recognition for good work, and encouraged to pursue individually fulfilling tasks.
Employee Englightnment Sulphey and BasheerM M Sulphey
an enlightened employee is capable of radiating a positive energy among his peers and colleagues. He creates not only a better surrounding by keeping his actions at par with his words, but also better humans of tomorrow not just limiting to commitment or engagement.
Reward System and Level of Staff Satisfaction among NonAcademic Staff of Sele...AJHSSR Journal
In any profit-oriented workplace, job relationship is seen as a trade procedure where workers
give inputs in terms of skills and expertise for the different rewards, compensations and incentives from their
employer which go far in deciding their satisfaction, performance and productivity. This study sought to
examine the level of staff satisfaction with the reward system implemented by three (3) selected tertiary
institutions in Enugu State, Nigeria. Survey design was adopted for this study. The population of the study was
1122 staff drawn from the non-academic staff of the selected higher institutions in Enugu State, Nigeria. A
sample size of 415 was obtained using Taro Yamane‟s (1964) formula for finite population. Four hundred and
fifteen (415) questionnaires were used to collect data from respondents who were non-academic staff members,
after being validated by experts in academia and human resources management. Burley‟s proportional
allocation was used to calculate proportionate sample size. Out of 415 copies administered, three hundred and
one (301) copies were returned and used for the analysis. Data were collected through primary and secondary
sources. Cronbach‟s Alpha was used to test for the reliability of the instrument, an Alpha of 0.79 was obtained
thus confirming the reliability of the instrument. The hypotheses formulated were tested using Z test. Findings
from the study revealed that the level of staff satisfaction with the reward system implemented by the tertiary
institutions is low (computed z-value of 24.385 against 1.645 and significance of 0.000) (z = 24.385> at p<
0.05) during the period studied. Based on the finding, the study concludes that the reward system implemented
have a very strong correlation with the satisfaction of non-academic staff in the institutions of higher learning
studied. In the light of the forgoing therefore, it was recommended that the reward systems implemented by the
institutions should be consistent with staff needs and relevant to the personal life of the employee. Also, the
reward system implemented should be reviewed at various levels to earn the employees‟ commitment and
satisfaction.
Research Inventy : International Journal of Engineering and Scienceinventy
Research Inventy : International Journal of Engineering and Science is published by the group of young academic and industrial researchers with 12 Issues per year. It is an online as well as print version open access journal that provides rapid publication (monthly) of articles in all areas of the subject such as: civil, mechanical, chemical, electronic and computer engineering as well as production and information technology. The Journal welcomes the submission of manuscripts that meet the general criteria of significance and scientific excellence. Papers will be published by rapid process within 20 days after acceptance and peer review process takes only 7 days. All articles published in Research Inventy will be peer-reviewed.
The objective of this Lecture and Research Update is to examine th.docxarnoldmeredith47041
The objective of this Lecture and Research Update is to examine the controversy surrounding pay-for-performance plans. One school of thought argues that extrinsic rewards decrease intrinsic motivation. Therefore, making rewards contingent on performance is ultimately detrimental to the organization. On the other hand, proponents of performance-based pay assert that it is a valuable management tool used to direct employee effort and motivate higher performance. The conceptual grounding of each perspective is described in more detail below.
Opponents of Performance-Based Pay
The primary criticism of pay-for-performance programs is based on Cognitive Evaluation Theory, which asserts that extrinsic rewards decrease intrinsic motivation (Deci & Ryan, 1985). Simply stated, individuals need autonomy and self-determination. To the extent that performance-contingent rewards are perceived as externally “controlling” one’s behavior, intrinsic motivation (the internal satisfaction one would normally feel in performing the same task) is predicted to decrease.
This theory was supported in early experiments with school children. One group of children was rewarded for how well they performed a given task (a game) and then was given free time in which they could continue to perform that task (but without the possibility of earning a reward). When the incentive was no longer available, children in this group spent less free time at the task than the group of children who had not received any type of performance-based reward.
Taking the argument against performance-based pay even further, Pfeffer (1998) contends that merit pay, a form of individual pay-for-performance, “has been shown to undermine teamwork, encourage employees to focus on the short-term, and lead people to link compensation to political skills and ingratiating personalities rather than to performance” (p. 115). In other words, individual performance-based pay can stimulate an unhealthy degree of competition and reduce cooperation among workers. Advocates of Total Quality Management, therefore, have discouraged the use of such plans (Deming, 1986).
Furthermore, Kohn (1993) argues that performance-based pay actually undermines the very processes leading to higher performance that it was intended to enhance. The notion that managers should motivate their workers by identifying what is important to them and offering it in exchange for some desired behavior (Milkovich & Newman, 2004, p. 261) amounts to a “bribe” that will ultimately backfire.
The shortcomings of extrinsic reward systems within organizations were recently summarized by Spitzer (1996):
Excessive dependence on monetary rewards
Lack of an “appreciation effect”
Entitlement effects
Undesirable behaviors being sometimes rewarded
Too long a delay between performance and rewards
Too many one-size-fits-all rewards
Short-term impact
The continued use of de-motivating practices that often accompany performance-based pay. (pp. 46-50).
Effect of Staff Performance Appraisal Outcomes on Employee Job Performance a ...iosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
The Moderating Role of Nepotism in the Effect of Employee Empowerment on Perc...inventionjournals
The purpose of this study is to investigate the potential relationship between nepotism, empowerment and organisational justice within the context of hospitality organisations. The research was carried out on 232 employees working at some 5 star hospitality organisations operating in Marmaris, which is a county of Muğla Province in Turkey. The data were collected through questionnaire technique. The questionnaire used in the study consists of four sections; demographic information, nepotism, employee empowerment and perception regarding organisational justice. In the study, correlation and regression analyses were conducted to find out the relationship between nepotism, employee empowerment and perceptions regarding organisational justice as well as some descriptive statistics aiming to reveal characteristics of the organisations where the participants were employed. Correlation analysis revealed a weak and negative relationship between nepotism and organisational justice. According to the regression analysis, nepotism was found to have a moderating role solely on meaning-competence dimensions when the relationships between dimensions of empowerment and organisational justice were considered.
This is my presentation about, How we as an Manager should motivate our employee.Please have a look of it because it is different the way we think about it.
The aim of this study is to investigate reward system and employee performance in three selected
companies such as Nestle Plc, Mumudia Integrated services and Bucebal ventures limited in Port Harcourt,
Rivers State. The study also shows how employees improve its performances in a reward system. Questionnaire
was used as instrument and 60 questionnaires were issued and while 50 questionnaires were retrieved to check
the respondent’s opinion.
EMPLOYEES VIEW ON PERFORMANCE APPRAISAL PROCESS AND ITS EFFECT ON WORK ATTITU...paperpublications3
Abstract: Performance appraisal is a means of evaluating employees’ current past performance standards set by the organization. The purpose of the study was to establish the employees’ views on performance appraisal process and its effect on work attitude in Kenya seed Company Limited. Stratified random sampling technique was used to select the 71 employees. The data collected from the field was analyzed using descriptive statistics. The results were then presented in tables, pie charts and bar graphs. On overall, the study found out that performance appraisal if carried out as a matter of routine improves the work performance in the organization. It was recommended that the management should continue embracing performance appraisal and employees to get more information on the standards against which they are being rated.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
International Journal of Business and Management Invention (IJBMI)
HRM coursework
1. 1
UNIVERSITY OF BRADFORD
School: University of Bradford
Department/Division: School of Management
Module Tutor/Supervisor: Simon Kelly
Module Number: MAN4222M
Module Name:
Human Resource Management
Title of Essay Question:
Please provide the whole question:
What is the relationship between employee
reward systems and organisational
performance?
Your UB Number: 15014022
Date of Submission: 09/12/2015
Mode of Study (on site/distance Learner: On Site
Word count (not including bibliography
and appendices):
1541 words
Statement of Authenticity:
By submitting this assignment through Blackboard, I confirm:
That this work is my own and that I have not plagiarised the work of others in any
form whatsoever.
That I am aware of the University’s definition of Plagiarism and understand how it
can be avoided.
That this work, or any part of it, has not been previously submitted to the University
of Bradford for assessment in any other module.
That I have read and understood the information provided below.
Signed: NORIYUKI DOCHI
2. 2
In recent years, the development of technology has kept the world closer, which has resulted in the
increasingly demand of competiveness in virtually all business situation around the world. In order
to survive in the competitive situation, effective management of human resource is crucial to
achieve better performance with fewer employees. Reward system has been implemented as one of
the means that plays a popular role in managing human resource better, which can lead to improve
the organizational performance (Gerhart et al, 1995). Porter (1985) also pointed out incentive
systems as one of the means that can translate into organizational performance. This essay will
firstly define the rewards system, and then focus on how company evaluates the employee while
examining the relationship between motivation and performance. In the later of this essay, the
relationship between employees rewards system and motivation will be assessed from theoretical
perspective.
Almost of all companies introduce the rewards system. According to the brief definition of reward
systems provided by Bratton, “Reward system refers to all the monetary, non-monetary and
psychological payments that an organisation provides for its employees in exchange for the work
they perform” (Bratton, 2007 cited in ACCA, 2013: 2). Also, Howard and Dougherty (2004)
argued that reward systems are designed by certain strategy. Reward systems can eventually help
employees to develop their knowledge, skill, flexibility, and productivity when rewards are
connected to work outcomes that support the strategic policy of companies.
Rewards schemes are divided into intrinsic and extrinsic rewards. Extrinsic rewards are
components that employees receive as part of the job such as financial payments and working
environment. Intrinsic rewards concern to the psychological satisfaction that employees receive
through actually undertaking what they do, for instance, intimate satisfaction and a sense of
contribution to the community they belong to (ACCA, 2013). In order to retain, motivate and
attract employees, the company has to carry out reward systems in right way. This is mainly
because the main purpose of reward systems is to provide the guarantee of success of human
resource strategies to motivated employees (Yi and Hai, 2011). The explanation of rewards system
mentioned above indicates that the reward system is designed to motivate employees, which means
organizations can believe that motivation is important factor to increase the productivity. Next
paragraph will make it clear whether motivation can impact on the organization performance,
evaluating performance appraisal.
In order to associate the individual preference with the motivation, performance appraisal is
necessary. It is mainly used to clarify the expectation of company and identify the weakness and
challenges of employees (Bouskilla-yam and Kluger, 2011). Though the performance appraisal in
MNCs has been widely used, it has brought many drawbacks (Avery and Murphy, 1998). Maley
(2013) argued that the process of how to evaluate individual achievement and comment on
employees is significantly questionable. In fact, the article of Klunger and Denisi reported that at
least 30% of the feedbacks that manager had provided to employees eventually led to a decrease of
employees’ performance. This means that employees can suffer from the pressure from the
performance appraisals. This idea is backed up by the statistical data. The survey conducted by the
SHRM showed that 66% of employees say that the performance review process hamper the
productivity (Dori, 2015). Moreover, 95% of manager were unsatisfied with their companies’
performance management processes. Not surprisingly, around 60% of MNCs estimated that their
companies as inadequate or worse as for the efficiency of managing employees’ performance
(Kochanski and Sorensen, 2005 cited in Jane, 2013). When taking a look at these statistic data, it
3. 3
can be concluded to two aspects. One hand is that it seems to be difficult to make employees
motivated since the employees’ motivation can be influenced by many different factors although
companies try to identify factors through performance appraisals. The other hand is whether
organization productivity will be high or low can depend on how much employees are motivated.
In the later of this essay, the relationship between rewards system and employees’ motivation will
be assessed with using psychological concepts, focussing on Vroom’s expectancy and Maslow’s
hierarchy of needs.
One concept that can explain the relationship between rewards and performance is Vroom’s
expectancy theory. According to Vroom’s Expectancy Theory (1964), employees are affected by
their insight for themselves during their task. In other words, how much employees perform bases
on personal elements such as knowledge, identity, skills, background and capabilities. Ramlall
(2004) represented Vroom’s theory was consisted as three elements: Expectancy, Instrumentality
and Valence (figure 1). First, Expectancy is the belief that making more effort leads to the increase
of performance. Second, Instrumentality is the belief that showing high performance results in
receiving a valued outcomes. Finally, Valence is the comparison of individual choice for peculiar
reward. A reward includes a valence since it is associated with the needs of employees
(Lunenburg, 2011). The work of Vroom indicates that expectancy, instrumentality, valence and
motivation are linked to each other by the equation.
(Akshitha, 2014)
As this equation consists of multiplication, each components effect with each other significantly.
In other words, if one of three factors is zero, it affects others and eventually motivation becomes
zero. Thus, for instance even if effort that people make will lead to how they perform, which will
lead to outcomes, people will not be motivated if the valence of the outcomes that employee
supposes to obtain is zero (Lunenburg, 2011). Vroom’s theory has some striking association with
employees’ motivation, which supplies directions for boosting employee motivation by adjusting
individual’s performance-to-reward expectancy, effort-to-performance and reward valences
(Lunenburg, 2011). With regard to these guidelines, essentially, Lunenburg stated that leaders are
required to do the following attitude: (1) increase the belief that if employees show good
performance, they receive right rewards, (2) increase belief that employees have enough ability to
achieve their job successfully, (3) increase the importance of rewards that employees supposed to
4. 4
gain results from appropriate performance. On the basis of this theory, it may be inferred that it is
important for companies to contribute the right rewards in the right way to employees in order to
keep their motivation at a sustainable level.
Another theory that can show the relation between rewards and their motivation is Maslow’s needs
theory. Maslow (1943) suggested that people seek to obtain what they actually need. When people
fulfilled one that they need, people pursue to fulfil the next one. Maslow’s hierarchy of needs
(figure 2) is composed of five motivational needs, which usually described as hierarchical
pyramid. Maslow’s concepts are highly beneficial to identify what employees need and to make
decision what can be done to motivate them. In addition, the theory makes employers realize that
depriving employees of needs may affect characters and behaviours negatively (Zeynep and Mert,
2014). This hierarchical model can be categorized into basic needs such as Physiological, Safety,
Love, Esteem and Self-actualization. Intrinsic rewards thoroughly serve higher order self-
actualization needs. Intrinsic and extrinsic rewards serve esteem needs. Extrinsic rewards solely
serve lower order needs (Schermerhorn, 2001). This indicates that rewards system can be closely
related to the concept of Maslow’s hierarchy.
(Finkelstein, 2006)
Moreover, Ramlall (2004) argued that employees are provoked to accomplish and preserve the
components for each stage of needs. Therefore, managers pursue to construct schedule and
establish managerial circumstances that keep employees highly motivated to achieve their needs
fulfilment. This thought was supported by the practical fact that as Fast Company reported, Chip
Conley who is Head of Hospitality at Airbnb and founder of the Joie de Vivre hotel chain
introduced the concept of Maslow to his business, which led employees to recognize the value of
their roles in the workplace. This eventually affected the employees’ motivation and respect for
their work (Kermit, 2010). Not only the academic thought but also the fact can suggest that there is
relationship between rewards system and employees’ motivation. However, it is unsure whether
Maslow’s theory applies for everyone mainly because his methodology is very limited. He
5. 5
researched the biographies and writing of 18 people who were classified as self-actualized. In
other word, his analytic method can be very subjective (McLeod, 2014).
Since the business environment has changed dramatically, many companies have been required to
increase organizational performance to compete with rivals. Companies expect employees to be
motivated by the reward system, which shows that highly motivated employees are crucial to
increase productivity though it is difficult to find the particular factor that impact on individual
motivation. Also, given statistical data for performance appraisals, it can be shown that the
productivity can be low level when employees are not motivated. Then when observing the
concepts of Vroom and Maslow, it can be seen that the evaluation of employees in the right way
boosts the employees’ motivation. In other words, through the rewards system companies try to
motivate employees with the purpose for the increase of organizational productivity. Interestingly,
Paul Hawke explained that the relationship between employee rewards system and organizational
performance in following way, “Good management is the art of making problems so interesting
and their solutions so constructive that everyone wants to get to work and deal with them.”(Avis,
2015: 71) It suggests that through the right implementation of rewards systems, companies could
try to advance their productivity by motivating employees.
References
Akshitha, R. (2015) Hypothetical case study on vroom’s expectancy theory
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