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Employee Rewards and Motivation
Introduction
At the crux of most business strategies is the desire to deliver quality and innovative products and/or services at the lowest possible cost and in the shortest amount of time. Employees are the most important resource in accomplishing that task therefore, reward and recognition systems should be an integral part of business strategies. Due to the changes in the business environment, human resources has changed and evolved from an employee record keeper to a strategic partner. As the business environment, changes so must organizational strategies for managing human capital. Strategies implemented by HR are an important factor in engineering change and motivating employees to align performance with the overall business strategy.
Motivational Theory Underpinning Reward Systems
Awards programs are designed to recognize and reward employees for contributing to the efficiency, economy and/or other improvement of company operations. The goal of such programs is to recognize individual or group achievements, or service in the performance of their duties. Modern companies strive to have a pay system that reflects the realities of the modern workforce where performance and results are emphasized and rewarded.
Job Satisfaction Attributes
According to an article by Dr. William Burmeister, while salaries are steadily increasing so is job dissatisfaction. The most common issues at the very heart of dissatisfaction, include (Cited in Burmeister, 2004):
· 42 percent dissatisfied with commute to work
· 44 percent dissatisfied with co-workers
· 44 percent dissatisfied with alignment of job with interests
· 52 percent dissatisfied with job security
· 68 percent dissatisfied with pay
· 71 percent dissatisfied with education and training plans
· 80 percent dissatisfied with promotion policies
· 80 percent dissatisfied with bonus plans
A survey conducted by the Incentive Federation, business owners and managers felt that cash rewards tend to blend in with other financial compensation whereas, noncash awards motivated employees more (Cited in Institute of Management & Administration, 2004). This proves that manager’s need to reach employees on a different level, find out what motivates them, and align rewards and incentives with both employee needs and company objectives
Shift from Compensation to Rewards
Some initial empirical evidence supports the idea that different types of reward systems more closely balance different generic strategies and is significantly related to increased levels of perceived organizational performance (Allen and Helms, 2002). Agencies are striving to create a flexible, competitive, and performance-oriented work environment that allows them to recruit and manage employees in the face of future challenges. To do this, their focus has shifted toward finding the best practices and innovations in pay, benefits, and other forms of compensation. Their goal is to achieve a diverse, results-oriented, high performance workforce, with a performance management system that effectively differentiates between high and low performers ultimately linking individual, team, and/or unit performance to organizational goals.
Components and Attributes Common to Benefit and Reward Systems
Companies with effective reward systems have the potential to institute a lot of pride in its employees. Some key aspects are indirect financial rewards, work content, career value, affiliation and direct financial reward.
Indirect financial rewards
Indirect financial rewards include paid holidays, sick leave and annual leave, two-part retirement plan, health, life, and long-term care insurance, child care and health flexible spending accounts, work/life program, and survivor benefits.
Work content
Ensuring employees have work that is commensurate with their knowledge skills and abilities, not only fulfills the employee’s intrinsic needs, but helps the company garner the employee’s best effort.
Career value
Having job security and opportunities for professional growth adds value to the employee’s career with the company and can aide in garnering employee loyalty. Affiliation
Rewards obtained from affiliation with the company are and added value and can be in the form of scholarships, student loans, credit union membership, and employee discounts.
Direct financial rewards
Ensuring pay is commensurate with the jobs knowledge, skills, and responsibilities shows employees that they are valued.
Summary
Effective reward and motivation programs must combine monetary, nonmonetary, and intrinsic motivation. Humans are complex people and what motivates one employee will not work for another. Therefore having a multifaceted program will increase manager’s changes of meeting some motivational need of each employee. Overall, operating an organization that respects it employees, fairly compensates them, and acknowledges their accomplishments will have a positive outcome.
References
Bird, Jim. (2003 March 18). Work-life balance defined - what it really means. WorkLifeBalance. Retrieved September 28, 2004 from the World Wide Web: http://www.worklifebalance.com/worklifebalancedefined.html
Burmeister, W. (2004). Living in dilbert's world: A cubicle eye's view of job dissatisfaction. Journal of American Academy of Business, Cambridge 5(1/2) Retrieved September 297, 2004 from the University of Phoenix Library (EBSCOHost database) on the World Wide Web: https://mycampus.phoenix.edu/login.asp
Institute of Management & Administration. (2003, Feb). New study identifies which benefits are key to driving retention.Managing Benefits Plans 1. Retrieved September 27, 2004 from the University of Phoenix Library (InfoTrac OneFile database) on the World Wide Web: https://mycampus.phoenix.edu/login.asp
Institute of Management & Administration (2004, Feb). Cash rewards blend into paychecks while noncash awards stand out. Report on Salary Surveys, 04-02 (8). Retrieved September 27, 2004 from the University of Phoenix Library (InfoTrac OneFile database) on the World Wide Web: https://mycampus.phoenix.edu/login.asp
University of Phoenix (Ed.). (2001). Employee Motivation and Compensation [University of
Phoenix Custom Edition]. Boston: Pearson Custom Publishing. |
