Rewards & Recognition

For productive manpower, job satisfaction is really essential. In earlier days, the employees were satisfied with the extrinsic rewards, extra payments like incentives, overtime payments, and fringe benefits in their jobs (Schultz, et al., 2012). Nowadays employees have different needs & expectations with regard to satisfaction in their job roles. Job satisfaction is identified as a great retention tool commonly among all employees over the world (Schultz, et al., 2012).

It indicates that the organization has to create different aspects for the employees, to balance their personal life and work-life to get the maximum deliverables from the employees while satisfying them. Few examples, high salaries, immediate values, KPI integrations, and instant gratification. Those will be identified as employee rewards to keep them retained with the company (Schultz, et al., 2012).

As a common theory, there were many discussions held by presenting the link between the satisfactions with financial and esteem rewards like higher salary, bonuses, promotion, commissions, and other incentives (Dropulic, 2014). Some believed that it helps in achieving the corporate objectives of the company, and it will maintain the productivity of the workforce within the company inadequately to prevent employees from not leaving the company as given below (Agbenyegah, 2019).

Financial Incentives - 

Merit Pay, Bonuses, Wages, and Salaries

Non-Financial Incentives – 

Recognition, Opportunities for Career Development, Job Promotion, Training

Some argue that, using a proper Management Control System-MCS which is capable of overcoming the organizational system of reward and punishment among employees (Dropulic, 2014).

They say that the employee may get a positive feeling about related factors and start talking positively in the working environment. And it will help to reduce subjectivity, appeasement, flattering, and over allegiance (Schultz, et al., 2012). Though the MCS can help to overcome this issue, there are many more reasons available for the turnover and it is not only because of not having fairness in the execution of both rewards and punishments. MCS is kind of a KPI–Key Performance Indicator to evaluate the employees in a proper formal way. (Dropulic, 2014).

In 1993, there was a different kind of study that exposed the importance of letting the employee get involved in tasks and decision making indirectly looped with the top management via the supervisors and managers which they believe will cause employee retention. And through this involvement, it enhances the self-satisfaction of the employees rather than giving financial and fringe rewards and benefits (Anderson, et al., 1994).

Unlike the previous rewards, there was a different kind of argument that had been presented that the employee retention will come with satisfaction to developing trustworthiness and ensure between the organization and the employees as a long term relationship/team spirit. This was a new theory that interpreted the relationship, with the trust/loyalty built into a strong formal relationship (GANESAN & HESS, 1997).

It is proving the importance of a proper reward and recognition system to motivate employees while aligning and allocating their job roles, and goals within the organization (Dropulic, 2014). The rewarding system involves balancing employees’ remuneration and acknowledgment with their work and tasks to be performed well with maximizing competitiveness and making deliverables efficiently to the organization. An organization can have a positive ROI to cover up the expenditure and overheads to lead the business to success in the market (Dropulic, 2014). 

The design of a reward system has a few important considerations such as the relative emphasis on extrinsic versus intrinsic rewards, performance and payment, and the compatibility of the mechanism of the rewarding system with the capabilities of the organization’s strategies and HR policies (Rai, et al., 2018).  A reward system has to complement the overall business objectives and other HR policies. A reward system needs to be adaptable to changes happening in the business environment. It is really important to adapt to the prevailing economic climates from time to time (Ndungu, 2017).

Example:

Financial and Non-financial rewards are offered to the Employees by the Company I work for.

·         Performance Allowances

·         Attendance Allowance

·         Data Allowance

·         Medical Insurance Schemes

·         Outbound Leadership Training Programmes

·         Referral programs

 

References

Agbenyegah, G. K., 2019. Effect of financial and non-financial rewards on employee motivation in financial institution in Ghana. International Journal of Innovative Research and Development, 8(8), pp. 121-130.

Anderson, E. W., Fornell, C. & Lehmann, D. R., 1994. Customer satisfaction, market share, and profitability: Findings from Sweden. Journal of marketing, 58(3), pp. 53-66.

Dropulic, I., 2014. Design of management control systems–A study of joint stock companies in Croatia. Journal of Contemporary Management Issues, 19(2), pp. 157-167.

GANESAN, S. & HESS, R., 1997. Dimensions and Levels of Trust: Implications for Commitment to a Relationship. Marketing Letters, 8(4), p. 439–448.

Imran, A., Ahmad, S., Nisar, Q. A. & Ahmad, U., 2014. Exploring relationship among rewards, recognition and employees’ job satisfaction: A descriptive study on libraries in Pakistan.. Middle-East Journal of Scientific Research, 21(9), pp. 1533-1540.

Ndungu, D. N., 2017. The Effects of Rewards and Recognition on Employee Performance in Public Educational Institutions. Global Journal of Management and Business Research.

Rai, A., Ghosh, P., Chauhan, R. & Singh, R., 2018. Improving in-role and extra-role performances with rewards and recognition: does engagement mediate the process?.. Management Research Review.

Schultz, R., Schwepker, C. H. & Good, D. J., 2012. Generational research in the sales arena. Innovative Marketing, 8(1).