Motivation and Reward Systems

Reward system is an organization’s most essential instrument for building and sustaining motivation in the workplace. A reward system is defined as the informal and formal processes by which performance of the members of the organization is identified, assessed, and rewarded. Obviously, rewards that are connected particularly to performance have the strongest effect on improving employee performance and motivation. Performance-based rewards fulfill numerous functions and objectives in organizations. The main principles comprise the correlation between motivation and rewards (Griffin & Moorhead, 2011). In particular, organizations would like their members to perform well and, consequently, have to motivate them to do so. When the reward system is related to greater performance, employees will most likely be driven to exert greater effort to get those rewards. When that happens, employee motivation becomes strongly tied to the organization’s goals.
Proponents of behavioral sciences have long promoted the value of reward systems, the methods by which managers distribute rewards based on performance, tenure, or other aspects (Yukl, 2009). Obviously, reward systems are essential because employees accomplish the tasks they are rewarded for and poorly perform those which do not have any reward. However, before initiating organizational change, the reward system must be examined to identify whether it will positively or negatively contribute. If it will negatively affect change, the reward system should be restructured before putting the process into practice. In order to evaluate reward systems, it is important to fully appreciate their characteristics. Rewards are classified into two groups, namely, extrinsic (e.g. promotions, salary increases) and intrinsic (e.g. job satisfaction, enhanced self-confidence).
Intrinsic rewards