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The effectiveness of an organization's performance and reward management system can have a significant impact on employee motivation, morale, and ultimately, their productivity. According to a 2008 study, a poorly designed or implemented reward system can lead to counterproductive behaviour and ultimately undermine the goals of the organisation.
Employee motivation is an intrinsic and internal drive to put forth the necessary effort and action towards work-related activities. It has been broadly defined as the "psychological forces that determine the direction of a person's behavior in an organisation, a person's level of effort and a person's level of persistence". [1]
Organizational reward systems have a significant impact on employees' level of motivation. Rewards can be either tangible or intangible. Various forms of pay, such as salary, commissions, bonuses, employee ownership programs and various types of profit or gain sharing programs, are all important tangible rewards. While fringe benefits have a ...
In general, Theory X style managers believe their employees are less intelligent, lazier, and work solely for a sustainable income. Management believes employees' work is based on their own self-interest. [6] Managers who believe employees operate in this manner are more likely to use rewards or punishments as motivation. [6]
Effective motivation strategies take into account the individual's unique needs and preferences, while also recognizing the role that both types of rewards play in influencing behaviour. It is important to achieve the right blend of intrinsic and extrinsic rewards within the overall compensation and benefits offered to an employee.
Selecting the appropriate rewards is vital to any program's success. The goal in choosing rewards is to select items that will spark the participant's interest or feelings, and support the program's objectives. Effective rewards will both motivate short-term behavior and provide motivation over time. There are several types of rewards.
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