Reward and Recognition
The Reward and Recognition are employee motivational factors those
influence and direct the employee behaviors to achieve the targets and goals (Danish
and Usman, 2010). The efficiency and the productivity of an organization can be
improved through a well-designed reward and recognition mechanism (Akafo and
Boateng, 2015).
Reward is an incentive which is given in return for an accomplishment of
a task/goal. Bonuses, promotions, gift certificates, flowers are examples of
rewards. Recognition is how the employees are publicly valued for their
contributions for the company. Positive feedback, appreciations, encouragements
are samples for recognition (Zeb, Rehman, Saeed and Ullah, 2014). ‘Employee-of-the-month’
and ‘Lunch-with-the-CEO’ are also the recognition programs (Akafo
and Boateng, 2015)
Total Reward Management
Total
Rewards concept had been developed since early 1990s, but a Total Rewards Model
was first unveiled in the year 2006. The model had 5 reward types including
compensation, benefits, work life balance, performance and recognition, and development
and career opportunities (Diankenda, 2015). According to Diankenda (2015),
target of any reward system is to,
i.
Motivate
employee
ii.
Retain
employee
iii.
Attract
employee.
However according to Armstrong and Murlis (2007), transactional rewards (like
monetary rewards) can be easily replicated by the competitors but not the relational rewards (like work experience), those attract, retain and motivate the
employees to provide there maximum for the organization.
Figure 1:
Components of total rewards (Source: Armstrong and Murlis, 2007)
The components of a total rewards model are illustrated in Figure 1
above. The organizations have customized
the Total Reward approach in their own way to build a better employer-employee
relationship and a healthy psychological contract (Armstrong and Murlis, 2007).
Benefits of a Total Reward Approach
According to
Armstrong and Murlis (2007), the benefits of rewards are as follows,
- Greater Impact: Strong motivation and commitment by the employee due to a combination of transactional and relational rewards.
- Enhancing the employment relationship.
- Increased engagement as a part of process: Employees get an opportunity participate in designing their own rewarding scheme.
- Flexibility to meet individual needs: Individual needs can be fulfilled through relational rewards.
- Winning the war for talent: Relational rewards attract and retain the talented people.
The Hay group engaged performance model
In 1990s Hay group developed a reward and recognition model with 6 key elements. ‘Inspiration of values’ and ‘Future growth and opportunity’ were the most valued rewards in most of the organizations. Tangible rewards were in the 3rd or 4th place (Armstrong and Murlis, 2007).
Figure 2: The Hay group engaged performance model (Source: Armstrong and Murlis, 2007).
Research findings
According to the research done by Ali and Ahmed (2009) using 80 employees in Unilever companies, there was a statistically significant relationship between the ‘Reward & Recognition’ and the ‘motivation’. Same relationship has been observed in the researches done by Ibrar and Khan (2015) & Akafo and Boateng (2015).
References
- Akafo, V. and Boateng, P.A., 2015. Impact of reward and recognition on job satisfaction and motivation. European Journal of Business and Management, 7(24), pp.112-124.
- Ali, R. and Ahmed, M.S., 2009. The impact of reward and recognition programs on employee’s motivation and satisfaction: an empirical study. International review of business research papers, 5(4), pp.270-279.
- Armstrong, M. and Murlis, H., 2007. Reward management: A handbook of remuneration strategy and practice. Kogan Page Publishers.
- Danish, R.Q. and Usman, A., 2010. Impact of reward and recognition on job satisfaction and motivation: An empirical study from Pakistan. International journal of business and management, 5(2), p.159.
- Diankenda, E., 2015. The relationship between reward management and recognition on employees motivation in the workplace (Doctoral dissertation, Dublin, National College of Ireland).
- Ibrar, M. and Khan, O., 2015. The impact of reward on employee performance (a case study of Malakand Private School). International letters of social and humanistic sciences, 52, pp.95-103.
- Zeb, A., Rehman, S., Saeed, G. and Ullah, H., 2014. A study of the relationship between reward and recognition and employees job satisfaction: A literature review. Abasyn Journal of Social Sciences, 7(2), pp.278-291.
I agree with you Dulshan.
ReplyDeleteA key instrument that management can use to direct employee motivation in desirable directions is the reward system. In other words, reward systems strive to keep employees engaged at work and encourage them to give their best efforts. The reward system is made up of all organizational elements, such as human resources policies, decision-making processes, and activities involved in allocating wages and benefits to employees in exchange for their work on behalf of the company (Basker and Rajkumar, 2013).
Hi Virosha,
DeleteA properly designed performance review can be used as a tool to improve the employee performance and organizational performance (Bacal, 2004).
Agreed. Rewards and recognition play an imperative role in motivating employees and improving performance (Lawler,2003)
ReplyDeleteYes Danushi. Thanks for your comment. The Reward and Recognition are employee motivational factors those influence and direct the employee behaviors to achieve the targets and goals (Danish and Usman, 2010)
DeleteHere I git point of reward and recognition,
ReplyDeleteEffectively managed rewards and recognition systems will have a strong positive
influence on employee attraction, motivation and retention. Happy and dedicated employees provide better service, can enhance customer satisfaction and
contribute to a company’s bottom-line financials, such as sales growth, market
expansion or even profitability (Tortosa, Moliner, and Sanchez 2009)
Hi Rinosha, yes, the efficiency and the productivity of an organization can be improved through a well-designed reward and recognition mechanism (Akafo and Boateng, 2015).
DeleteIts fascinating to see how Hay group's engaged performance model is developed. This model covers mostly all elements of engagement and performance. I would call it a "Perfect Model"
ReplyDeleteHi Indrajith, All companies should have a reward and recognition strategy. The performance appraisals should be integrated with human resource management systems like talent management and should be integrated with the organizational strategies like talent management strategy and business management strategy (Lawler III, Benson and McDermott, 2012).
DeleteGood read, by the way Walker (2001) asserts that praise from superiors, coworkers, and clients increase loyalty. In the year 2002, the international consulting firm "Watson Wyatt" carried out a study in the USA, surveyed 12750 workers across all career levels and throughout all significant industry sectors to learn about their perspectives regard their employers and place of employment. According to the report, acknowledgment is crucial for employees, and they want to hear that the job they did was recognized and valued.
ReplyDeleteHi Larry, recognition is how the employees are publicly valued for their contributions for the company (Zeb, Rehman, Saeed and Ullah, 2014). ‘Employee-of-the-month’ and ‘Lunch-with-the-CEO’ are novel recognition programs (Akafo and Boateng, 2015) in addition to the traditional recognition methods like positive feedback, appreciation & encouragement.
DeleteWell compiled post. Yes I agree that the reward system plays a crucial role in employee motivation. It can be either financial or non financial rewarding systems. Gungor (2011) stressed upon the fact that reward management system has a high impact on organization's ability to attract, retain and motivate employees and through the use of that gain high level of performance.
ReplyDeleteAccording to Armstrong and Murlis (2007), transactional rewards (like monetary rewards) can be easily replicated by the competitors but not the relational rewards (like work experience), those attract, retain and motivate the employees to provide there maximum for the organization
DeleteThis is very insightful. Rewards and recognition are highly important factors in boosting employee motivation (Hansen, Smith and Hansen, 2002). Once an employee had gained recognition for his work, the effect of that recognition starts fading after some time. In order to further enhance the impact of recognition, it should be followed by suitable rewards. Recognition alone may be sufficient in some cases, but rewards have a better effect in creating a long-lasting motivation.
ReplyDeleteIn addition rewards can be categorized into 2 categories: transactional and relational. Transactional rewards can be easily replicated by the competitors. But not the relational rewards. So relational rewards are more effective in attracting, retaining and motivating the employees (Armstrong and Murlis, 2007)
DeleteThis comment has been removed by the author.
ReplyDeleteRemuneration is Important. It is one of the most ultimate benefit of an occupation. According to HR Future Levine and Alaina (2017) stated that the most straightforward method to recruit and retain top people for any position is to offer competitive salary and benefits. Employees increasingly associate job happiness with higher salary and perks, making it a top priority for any applicant interested in working for your company. It will help minimize employee turnover because your best employees will be more inclined to stay with your organization.
ReplyDeleteHi Aruna,
DeleteTotal Rewards concept had been developed since early 1990s, but a Total Rewards Model was first unveiled in the year 2006. The model had 5 reward types including compensation, benefits, work life balance, performance and recognition, and development and career opportunities (Diankenda, 2015).
Per reference in your article above Danish & Usman (2010) further argues organizations in today’s environment seek to determine the reasonable balance between employee commitment and performance of the organization. The reward and recognition programs serve as the most contingent factor in keeping employees’ self esteem high and passionate.
ReplyDeleteYes Ahamed,
DeleteAccording to Diankenda (2015), target of any reward system is to,
i. Motivate employee
ii. Retain employee
iii. Attract employee.
Hi Dulshan, Rewards and recognition have major potential to boost employee engagement and corporate performance in a world in which four out of every 10 employees are not engaged (Brown and Reilly 2013).
ReplyDeleteHi Chathuranga,
DeleteIt's alarming to hear that 4 out of 10 employees are not engaged. However according to the research done by Ali and Ahmed (2009) using 80 employees in Unilever companies, there was a statistically significant relationship between the ‘Reward & Recognition’ and the ‘motivation’. Same relationship has been observed in the researches done by Ibrar and Khan (2015) & Akafo and Boateng (2015)
Adding Further Dulshan, Reward System plays a vital role in enhancing employee creativity and Motivation ,of dissatisfaction and low performance.
ReplyDeleteRewards prove to be as a tool to increase performance and change behaviors in dissatisfies employees.
Employees are the assets of the firm and they are the hands and brains through which the whole organizational
process comes to life. Therefore, a fair reward system could build job satisfaction and productive behavior in an
employee. According to Bahaudin G Mujtaba, 2007 (Coaching and Performance management: developing and inspiring
leaders, pp 261, Para 2), “Reward system should be linked with goal-setting, employee development,
competency measures, and team performance.