Impact of Rewards and Recognition on Employee Motivation

 Impact of Rewards and Recognition on Employee Motivation

Employee rewards and recognition have become critical component of every successful business today. It is an essential aspect in motivating employees to perform at a higher level for the betterment of employees and the organization. Meantime, organizations do their level best to keep employees motivated by providing necessary rewards and recognition to retain and satisfy employees. 

Figure 1. Extrinsic and Intrinsic motivation (https://www.verywellmind.com/differences-between-extrinsic-and-intrinsic-motivation-2795384)

What is Motivation?

Motivation is the interest to show a high level of determination towards the company target, in order to satisfy some individual need. Also, an unaccomplished need triggers an internal tension that drives the individual to perform in order to achieve the set target or the need. Bartol and Martin (1998) cited by Ovidiu-Iliuta Dobre (2013) defined motivation as an internal force that infuses a person to please an incomplete need and to achieve many goals. Further, Daft (2014, p.526) defines motivation as internal or external aspects which motivate a person to do particular action toward the organization's success. Also, Bruce. (2011, p.2) stated that Internal Motivation is an encouragement that comes within such as self-desire and ambition, and External Motivation derives from external factors such as rewards, salary increments, incentives, and bonuses which motivate the employees to give their best in the allocated task.

Rewards and Recognitions

Silverman (2004, p.2) explains rewards are identified as giving something in favor of an exceptional job, such as a bonus, or incentive for the work. Further, recognition includes a unique message or appreciation for a special work. Moreover, Mullins (2016, p.89) stated that money is limited in every organization hence non-monetary reward plays a vital role such as empowering employees with new tasks, flexible work hours, career development programs, and many more. Extrinsic rewards have an impact on motivation and intrinsic rewards have an indirect impact on motivation.

Factors of Rewards and Recognitions

Figure 2. Rewards and Recognition (https://www.dreamstime.com/stock-illustration-reward-recognition-blue-grey-blocks-r-r-text-over-background-image74931181)

Fair pay (Extrinsic reward)

Asaari, Desa, and Subramaniam (2019, p.50) describe fair pay as a way of settlement from an employer to an employee, whether stated in the employment letter or not. Further stated salaries are described as compensation paid to employees who work on a monthly or yearly basis. The salary scale needs improvement which can motivate employees. Which will ultimately help to gain loyal employees.

Bonus Scheme (Extrinsic reward)

Organizations have managed to enhance productivity by paying bonuses to employees. A bonus scheme may increase efficiency by boosting morale and decreasing employee turnover. It also creates more loyal employees within the organization. Fisher (2015, p.166) stated that organizations promise to pay out some sort of compensation upon the accomplishment of certain targets set for each employee. Workers will be able to compare employees’ performance based on company revenue. The bonus needs to be paid out based on productivity. Based on employee performance during the years under appraisal, organizations use bonuses to reward employees.

Training & Development programs (Intrinsic Reward)

Training and development for employees is a mandatory requirement in order to accomplish the set targets of the organization. Training and development are considered intrinsic motivation for employees. Jehanzeb and Dr. Bashir (2013, pp243-252) consider that originations offer training and development programs for their employees to attain a high level of employee satisfaction and decrement in employee turnover. 

Flexi hours and working from home facility (Intrinsic Reward)

the flexible working hour arrangement shows employee satisfaction it also indicates that flexible working hours have helped the employees to balance both work and personal life well. , Shields (2007, p.333) mentioned that flexible working hours help employees to have a better work-life balance by deciding when to commence work and when to end. Most of the employees feel relaxed and happy since they are getting the chance to balance their work and personal life as they want. Since work-life balance is an essential element for life and job satisfaction it helps to reduce absenteeism and employee turnover.

Conclusion

reward management is practiced by the organization in order to absorb and retain appropriate employees and encourage them to perform better. Also, rewards can be segregated into two main aspects such as intrinsic and extrinsic rewards. Intrinsic rewards offer job satisfaction, work content, and recognition. On the other hand, extrinsic rewards come in the form of payment, supervision, promotion, etc. organization has many rewards and recognitions offered to its employees in order to motivate and drive the organization to its desired goal.

References

• Ovidiu-Iliuta Dobre (2013) Employee motivation and organizational performance. review of applied socio- economic research, 5(1), pp. 54.

• Richard L. Daft (2014) New era of management. 11th edition. South-Western Cengage Learning: Cengage Learning India Private Limited.

• Michael Silverman (2004) non-Financial recognition the most effective of rewards. UK: Institute for employment studies

• Laurie J. Mullins and Gill Christy (2016) Management and organizational behavior. 11th edition. UK: Pearson.

• Muhammad Hasmi Abu Hassan Asaari , Nasina Mat Desa and Loganathan Subramaniam (2019), ‘Influence of Salary, Promotion, and Recognition toward Work Motivation among Government Trade Agency Employees’, International Journal of Business and Management, 14(4), pp. 50-51. [Online] DOI: 10.5539/ijbm.v14n4p48 (Accessed: 24 April 2023).