It is equally concerned with non-financial rewards such as recognition, training, development and increased job responsibility. Understanding the relationship between risk and reward is a crucial piece in building your investment philosophy. Investments—such as stocks, bonds, and mutual funds—each have their own risk profile and understanding the differences can help you more effectively diversify and protect your investment portfolio.
Reward management is important for the following reasons: Builds loyalty and honesty. People are motivated in their professional lives by factors including money, recognition and meaning. These factors can have a major influence on productivity, and an employee might rely on one or more of these areas to foster a passion for their work.
Because intrinsic rewards are intangible, they usually arise from within the person who is doing the activity or behavior. According to the drive theory of motivation, people are motivated to take certain actions in order to reduce the internal tension that is caused by unmet needs.
The drive theory is based on the concept of homeostasis, or the idea that the body actively works to maintain a certain state of balance or equilibrium. Assess the link between motivational theory and reward. The connections between motivation, rewards, and job satisfaction of the employees are of strategically importance for the organization for its success. Organization managements need motivated employees for maintaining an effective workforce which is willing to achieve strategic organizational goals and objectives.
However, McClelland focuses interest on providing employees with the capability to persuade their needs for success, power, and relationship. Indeed, some observers may even believe the two terms to be one and the same. However, this is not the case — far from it in fact.
The definition of a reward is: a thing given in recognition of service, effort, or achievement, or; a fair return for good behaviour. Put in simple terms, a reward is something which is actually given to an employee, whereas an incentive is a motivating factor. Different kinds of satisfaction lead to diverse objectives and behaviours which ascend from different types of motivation in getting different types of rewards.
Rewards with their aftermath relationship are expected to establish on satisfaction of the employees with their organization. It is normally seen that employees who reveal high job satisfaction is motivated by rewards, and rewards supported work engagement. The employee satisfaction achieved through rewards is established to be associated with job satisfaction.
In addition, job satisfaction is associated with the monetary compensation pay, promotion, and incentives and non-monetary compensation is one of the most important explanatory variables in an organization.
Organizations are to have determined a balance between the performance of the employees and their commitment to the work which result into job satisfaction. Reward and motivation are the two main factors which have an effect on the job satisfaction and motivation of employees. There is a significant relationship between reward and recognition, and between motivation and job satisfaction. Providing the financial benefit to employees without any prominent expression also loses its importance. Rewards have a direct link with the motivation and job satisfaction of the employees.
Variations in rewards and recognition can bring a positive change in work motivation and job satisfaction of the employees. Fig 4 shows a comprehensive model of rewards and incentives. It has been shown that strategic rewards which are vertically integrated with the support of organizational strategies can also be horizontally integrated with other human resource HR strategies, in order to achieve the employees as well as the organizational needs.
The comprehensive rewards system is to be developed in a way that people strategy is aligned with the organizational strategy. Hence, when looking at the concept of the comprehensive rewards system, it is necessary to identify that it aligns with strategic rewards.
It lays emphasis on why it is imperative to get the financial rewards element right and also providing employees with rewarding experiences which arises from the work they do, their work experience, how they are managed and developing their skills careers. This essentially means that while getting financial rewards right it is important for the organization to continue to practice the things which enhances the elements that contribute to non-financial rewards. The comprehensive reward system model consists of five elements of rewards including compensation, benefits, work-life balance, performance and recognition and development and career opportunities.
These elements signify the tool kit which the organization selects to offer for the comprehensive reward system which is aligned with the value proposition that creates value for both the employees and the organization.
It is also important to understand the elements which the comprehensive reward system is comprised of. It is necessary to understand why the comprehensive reward system elements are vital in the organization. The five elements of the comprehensive reward system can be managed both formally and informally.
The elements also take into consideration the external influence it has on the organization, for example, regulatory issues, cultural influences and practices, and competition. However, they are not mutually exclusive and are not intended to represent the ways which the organization organizes or deploy programs and elements within them.
But they are known to be the most important factors of attracting, retaining and motivating employees. The universal rewards approach is required and needs to be to be in accordance to the industry practice and culture in order to ensure the successful implementation of the comprehensive reward system in the entire organization.
Fig 5 shows a model for comprehensive reward system. There are essential attributes that contributes to the success of a reward system for the employees. These attributes are i recognition of individual differences between the employees, ii clear identification of behaviour deemed worthy of recognition, iii allowing employees to participate in the reward system, iv the system is to link rewards to performance, and v the recognition process is to have clear visibility.
Employee rewards system is not only about tangible and intangible awards. It is also about changing the corporate culture in order to meet goals and initiatives and most importantly to connect employees to the core values and beliefs of the organization. Strategic employee recognition is seen as the most important program for the organization not only to improve employee retention and motivation but also to positively influence the financial situation.
News Home Management Motivation and Rewards. Motivation and Rewards satyendra July 14, 0 Comments Extrinsic motivation , Incentives , Intangible rewards , Intrinsic motivation , Job satisfaction , Maslow hierarchy of needs , Motivation , rewards , Tangible rewards , Motivation and Rewards In the ever increasing competitive business environment, organization managements are now recognizing that there is a significant opportunity available today for improving the return on the human resources investment.
Fig 1 Process and type of motivation The process of motivation is initiated by the conscious or unconscious recognition of unsatisfied needs. Content theories — These theories of motivation are based on the needs of individuals.
These theories try to explain why the needs of individuals keep changing with time and therefore focus on the specific factors which motivate them.
These theories, in general, explain motivation as the product of internal drives that encourage the individual to move towards the satisfaction of his needs. Process theories of motivation — These theories tries to explain how behaviour change occurs and why individuals act in different ways.
These theories focus on how an individual needs influence his own behaviour. These theories originate from early cognitive theories, which state that behaviour is the result of conscious decision making processes. Major process theories of motivation are i reinforcement theory ii expectancy theory iii equity theory and iv goal setting theory. Fig 3 Expectancy model for reward Employees change their behaviour by working harder or prioritizing their actions if they know that by doing so they are going to be rewarded with something of value to them.
In the organization, rewards play an important role in building and sustaining the commitment among employees which ensures a high standard of performance and the employees constancy Reward refers to all categories of financial benefits, tangible services and benefits which an employee receives as part of employment relationship with the organization.
Satisfaction at home is important because it has a significant impact on employees' ability to do their jobs well and avoid issues with presenteeism, or not working to full capacity when they are at work.
Motivated and happy employees also contribute to the bottom line — and the difference is significant. Profitability also increases with employee engagement, with those companies boasting engaged employees seeing almost one-third higher profitability.
Clearly, there is a return on investment that's inherent in keeping employees satisfied with their work. Beyond keeping employees happy, though, which is key to motivation, employee recognition also increases trust in the workplace. Rewarding and recognizing employees creates stronger relationships, which in turn spurs motivation. And finally, as mentioned previously, rewarding employees for their work motivates them to stay. The U. Recognizing and rewarding employees demonstrates both a respect and appreciation for their efforts.
It shows the employer trusts that they are doing their jobs well, which not only encourages them to stick around, but also to work harder to give their best efforts. If rewards are such powerful motivators, it would seem to follow that punishment, or the threat of punishment, could be just as powerful. After all, no one wants to experience pain, whether it be actual physical pain or the psychological pain that comes from being humiliated, demoted or even fired.
Research indicates, though, that when it comes to motivating employees to act, rewards are far more effective than punishments.
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