How Reward System Effects on Employee Motivation

I usually hear those words “rewards” and “motivation”. How those two words always link together? Are they having any connection or they are just two concepts? Most of the time, that question has gone through my mind. Finally, I decided to make a clear picture of that.

I got to know the connection between the reward system and employee motivation. Firstly, we need to know about these two concepts. What is a rewards system means? According to Tze et al. (2012), the reward is the compensation that an employee receives from an organisation for exchanging the services offered by the employee or as a return for the work done? It is only one point of view, but people have different views about rewards. Anyhow, rewards can influence an employee’s performance up to some extent. How rewards impact on employee motivation? Motivation is concerned with the strength and direction of behaviour and the factors that influence people to behave in specific ways. In this explanation, I have highlighted a few words which clearly show that motivation means that control people by using some elements. What are those factors? It is a very tricky question! What motivates employees and is the reason why the organisations come up with reward systems. Because employers know without giving them anything, they will never perform well. Based on that, I did a little research on how the reward system impact on employee’s motivation. The results that I got are quite impressive. During the research, most of the employees have stated that they want rewards to motivate and perform well. And most of the employees said that they prefer financial rewards as a reward.

Usually, rewards are divided into two parts: one is financial rewards or extrinsic rewards and the second one is non — monetary rewards, which means intrinsic rewards. These two concepts are the basis of each reward system. Companies want to adopt both rewards types. But sometimes they mostly focus on financial rewards, that they think it motivates employees most. Up to a certain point, it is true. Most of the employees stated that the financial rewards motivate them most. But few still believe that non — monetary rewards can affect their motivation. I also agree with them to some extent. But it is too early to state my opinion.

According to what I have learnt from my research, most of the employees prefer some rewards more than others. Based on the results, I have realised that they love a bonus. Mostly, mid-year or year-end bonus. It is the right preference when it comes to them. Another one is fair to pay and increment. That is also a very concerning area. And I am not going to talk about that deeply in there. Because it is not a simple area, but a very deep area to discuss. Apart from that, they also stated that they want promotion and more learning and development programs. It shows employees wish to have both financial and non — monetary rewards to motivate them. But more preference is for financial rewards.

However, why employees still not satisfied with the rewards which they get from their companies? Does it mean that companies don’t have a proper and realistic reward system? or do they have one, but they don’t know how to use it in an appropriate way to get the best out of their employees? Based on my research, I found some reasons why employees still not satisfied with the current reward system of their organisations. One reason is employers always assume that employees will love, or they want what they offer. But it’s not the reality. Usually, that is the nature of the human being. They always want something more. Therefore, the organisation should always try to match what they want. As an example, every year, most of the organisations organise year-end or Christmas parties. Unfortunately, that is not what employees want. They want a year-end bonus or some extra cash in hand. Because it is year-end and there are so many family commitments, which they must fulfil. So, they prefer that as a reward. But the organisation still not understand that. This is only one example; there are quite a lot.

This type of misunderstanding drive employees towards dissatisfaction. That is why it is always recommended that employers need to have a very good idea about the employee’s desires. But I know it is not an easy task. There is one way that they can do that. Consider the assistance from HR departments to help and ask them to figure out that. They know how to do that properly. Because they are the once always interact with employees. They can arrange one to one sessions with selected employees to gather required feedback and study. Or they can collect some information through a survey. And also, they can arrange a suggestion box and ask them to share their thoughts through that. Another way they can use a digital platform for that is by making an app or technical tool to collect employee feedback. Because nowadays most of the companies do that. It is a straightforward and user-friendly way.

Using those types of methods, the HR department can collect the required data. And then, they can create a sound reward system based on that. But it doesn’t mean the employer willing to give all the requirements which employees have. It is not a good factor because employers also have so many targets hit on their side. But at least a few of desires they can fulfill by avoiding unnecessary conflicts.

According to my perspective, giving a substantial reward by using a proper reward system affect employee motivation. And it is impact and employee performance too. Therefore, the organisation always try to make a better environment for their employee. All these factors finally impact on organisation goals and objectives. With that organisation, responsibility is to make sure to maintain employee-friendly policies and practices.