Rewards and recognitions in the workplace are a major contribution to the performance of the organisation and the employees. They are associated with motivating the employees to perform better. Rewards are also a way to increase the engagement of employees in the organisation. Organisations have been searching for different ways to reward their employees which would lead them to contribute better to the performance of the organisation by elevating their own performance. The productivity of the employee is a major contributing factor to the expansion of the organisation and therefore the organisation focused on the better performance of the employees. Organisations manage reward programs based on the performance of their employees which motivates them to work harder so that they can become a part of the programme and achieve their desired rewards. The reward systems and programs are formed so that they align with the organisational goals and can contribute to their betterment. The report will discuss about the impact of rewards on the performance of the organisation. The study will critically analyse the statement and determine the different ways that rewards and recognitions have created an impact on the performance of the employees and in turn the organisation’s performance.
As stated by Terera and Ngirande (2014), rewards are an important feature of an organisation and their Human Resource Management. The reward system that is present in the organisation and the compensation that they provide to their employees will be helpful in determining the level of commitment of the employees towards the organisation. Edirisooriyaa (2014) further state that in the competitive times it is necessary for every organisation to build strategies which will help them to acquire a workforce which is competent in nature and contribute to the fulfilment of their goals. Motivation is determined to be one of the factors which contributes to the competent nature of every workforce in any organisation. It helps the employees to direct their attention and focus to the fulfilment of the organisational goals. To establish this organisations take the help of many processes and strategies which might make their wok easier. One of the most common ways is to develop a reward system which can cause satisfaction to the employees. The author states that rewards are a form of benefit that is presented to an employee in exchange for responsibility rendering a service within the organisation. Moreover, as discussed by Asim (2013) rewards mainly monetary rewards help in the motivation of the employees more than any other form of rewards. This is because monetary compensation is seen as more valuable as compared to any other non-monetary form of compensation. Khan, Shahid, Nawab and Wali (2013) derive that the difference that exists in an employee regarding the satisfaction and the dissatisfaction of their job, at most times, lies in the reward system and the rewards that are being received by the employee from the organisation and also the type of reward that they receive. In most cases, employees have a perception regarding the reward that they might receive for the work that they have been outing in the organisation. The satisfaction of their job lies in the fact that they get the desired reward from the organisation for their hard work and performance that they have been conducting for the organisation.
According to Ajmal, Bashir, Abrar, Khan and Saqib (2015) rewards are of two types which are intrinsic and extrinsic rewards. Intrinsic rewards are cashless rewards or those rewards which do not have a physical existence. These rewards come in the form of appreciation, acknowledgement, respect, recognition and professional growth. On the other hand, extrinsic rewards have a physical existence and are monetary rewards. These rewards are presented in the form of bonuses, salary and other forms of monetary payment which is given to the employees on the basis of their performance and contribution towards the organisation. Extrinsic rewards are seen to be more effectively in maximizing the performance of the employees in an organisation as compared to intrinsic rewards. Uzonna (2013) argues that intrinsic awards also play a very important in the motivation and the job satisfaction of the employees. Many employees prefer appreciation and recognition in their job and are motivated by it since they feel that the hard work that they put for the organisation would not just be rewarded with monetary benefits but should also receive the desired value from the management and the other employees of the organisation (Schlechter, Thompson & Bussin, 2015). Moreover, there are several employees who prefer challenges and hard jobs in their workplace so that they can showcase their talent to the management. Such employees prefer recognition for the challenges that they have taken up for the growth and the betterment of the organisation. The author state that there were several surveys which were conducted on the workforce of several organisations. As in the case of Credit West Bank Cyprus, 50% of the employees who responded to the survey said that they prefer recognition with a higher position in the organisation for their hard work, 6% said that they would prefer to be recognised by the organisation by them being given more responsibility and 20% of the respondents said that they would prefer cash rewards for their hard work as opposed to recognition (Uzonna, 2013). On the other hand, monetary rewards also have a huge impact on the performance of the employee and this goes for the majority of the employees in majority of the organisations. This form of reward is seen to be more appreciative than words and show the employees that the management value the employee for their hard work.
Figure 1: Impact of monetary motivation on employee performance
Source: (Uzonna, 2013)
Osibanjo, Adeniji, Olubusayo and Falola (2014) focuses on the importance of compensation packages in the organisation that is develop for the employees. These packages are developed in such a way that they are able to satisfy the employees according to their current performance. The packages are complied with both intrinsic and extrinsic rewards such as salaries, bonuses, promotion, allowances, recognition and such so that they are able to appeal to the employees in both ways and show the value that they have for the organisation. These compensation packages work better at motivating the employees at performing better and harder for the organisation since they receiver both monetary reward and recognition for their work in the organisation (Snelgar, Renard & Venter, 2013). However, the compensation packages should be communicated clearly to the employees based on the work that they do and the position that they hold in the organisation. Not every employee would receive similar compensation packages and this could create a controversy and dissatisfaction among the employees if the extent of the compensation packages are not explained properly to the employees of every position. Employee performance being an independent variable can be influenced by rewards which are given by the organisation since every employee needs a motivating factor for their hard work so that they can push themselves to work harder and better when they feel that their work contribution is being valued by the organisation (Osabiya, 2015). Awards are given to the employees due to their ability to accomplish the goals that have been pre-determined and set by the organisation and hence their work should be appreciated by the organisation.
As further stated by Yousaf, Latif, Aslam and Saddiqui (2014) the lack of financial and no financial rewards from the part of the organisation often leads to poor performance and even lack of performance from the employees since they feel that their hard work is not being valued by the organisation. The benefits that the employees pre determine for themselves during their wok process motivates them to work harder and derive good results so that they may be able to receive the reward, however the lack of presentation of those rewards makes them dissatisfied. In such cases rewards become an important factor since along with the motivation of the employees for better performance they aim to create a healthy relationship along the employees and the management of the organisation (Kwenin, Muathe & Nzulwa, 2013). As determined earlier in the study, monetary rewards are derived to be more useful than non-financial rewards, however, there is always a level to the organisation providing monetary rewards to their employees. Once the level is reached the organisation takes the help of non-financial rewards such as recognition, continued appreciation to motivate the employees to perform better for the organisation since they would be unable to provide further monetary reward to the employee. Other form of non-financial reward which would be better able to motivate the performance of the employees would be promotion or performance appraisal which states that the organisation is interested in the professional development and growth of the employees (Kuranchie-Mensah & Amponsah-Tawiah, 2016). This is also an important reward which is appreciated by the employees since other than monetary incentive employees also wish to grow within the organisation and get promoted to higher positions so that they could climb the corporate ladder efficiently and with their merit and productivity.
Figure 2: Classification of rewards or incentives in an organisation
Source: (Olubusayo, 2016)
Sajuyigbe, Olaoye and Adeyemi (2013) proposes that rewards play a very important role in the performance of the organisation since they succeed in motivating the employees of every organisation. A motivated employee is an important factor for the organisation since they would be more efficient and productive and will be more willing to work for the fulfilment of the goals of the organisation as opposed to the employee who have low level of motivation in the organisation. Moreover, the ability of an organisation to reward an employee directly depends on the ability of an employee to perform to the best of their potential (Caza, McCarter & Northcraft, 2015). This is because the organisation will only reward those employee who would be able to show their potential and talent and would be deemed important for the organisation so that they can be motivated to perform better. Employees who show low level of commitment towards the organisation and do not perform efficiently with the full extent of their potential will not be rewarded by the organisation and hence would always face low level of motivation (Olubusayo, 2016). Therefore, it can also be said that reward given by the organisations is directly proportional to the performance of the employee and vice versa and also that the reward system developed by organisations have a great impact on the better performance of the employees and thereby the organisation as a whole.
Conclusion
Hence, it can be concluded that rewards have a great impact on the performance of the employees and the organisation. This is because they have the ability to motivate the employees into performing better by making them understand that their contribution is being valued by the organisation. Both intrinsic and extrinsic rewards fulfil the aim of motivating the employees but the importance of each award lies on the kind of employee and their desire of the type of award that they see fit for their given performance. The right choice of reward by the organisation would help in the better motivation and the performance of the employees and therefore, the growth of the organisation.
For better results regarding the system of rewards in an organisation there are certain recommendation that could help them to motivate the employees in a better way. The organisation should extensively evaluate the performance of the employees and align them with the needs of the employees with the help of a feedback that could be derived from them regarding the importance of rewards in their work performance. This feedback will help the organisation to determine the type of reward that the employees value more, based on which the management could develop a reward system which would be beneficial for both the employees and the management. The management should also try to motivate the employees who have low level of motivation by giving them a chance to receive rewards based on certain challenges and tasks that they would have to complete to get the reward. This would be beneficial in two ways as it will help the employees to use their unused potential and engage in a healthy competition for the completion of the task and the management would have a full active workforce who would be working for the fulfilment of the organisational goals.
References
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