by Minor Magical

Created on: April 29, 2010

ABOUT MOTIVATING EMPLOYEES BY REWARDING THEM

Rewarding employees for good performance possesses great motivational value because all human beings value recognition. It is a fact that employees derive satisfaction from having someone appreciate their efforts for a job well done.

Organizations use rewards for purposes of behavioral control and performance evaluation. However, the management in most cases takes it upon its self to determine items that might be of value to the employees.

According to most managers, employees are motivated by monetary rewards, job promotions, power or status and holiday incentives. The assumption is that employees can be encouraged to work harder and increase productivity in the promise of bonuses, salary raises, promotions, share options and having time off.

The question that arises in view of these traditional means of performance appraisal and evaluation is whether incentives such as the once mentioned above are an effective means of motivating employees. Consider, for example, the effect of monetary rewards on a company's financial resources if they are not properly planned for and especially if the company is operating on a tight budget. Some employees will also be at the top more often than others. Therefore, if the rewards are based on a motivational contract, what happens when these employees reach the peak of the rewards system? There will be nothing left to motivate them. Eventually their performance graph starts to decline. The effects of this can be catastrophic to the organization.

Employees have different reward preferences. What seems motivational to some employees might be of less value to others. Organizations might find it extremely impossible to tailor rewards to individual employee requirements without incurring additional costs.

Competitive reward schemes are an important part of performance evaluation. They are also a way of attracting and retaining qualified employees. However, for optimal results, these measures should be used in conjunction with other ways of evaluating performance such as the financial performance measures, economic value added and a horde of other non-accounting measures.  Evaluation should also not be done subjectively. This therefore, calls for a well designed evaluation a criterion that is explicit and devoid of manipulations.

A good performance appraisal system should poses some qualities which include but are not limited to:

1.) It must be cost effective: a company must be able to implement the scheme without compromising value or straining other factors of production.

2.) It must be based on a contract. This is just a way of establishing operational rules and procedures. It also gives assurances that both parties will meet their end of the contractual demands.

3.) The basis of reward should be described explicitly and the evaluation criteria should also be clearly outlined.

4.) It should be dynamic to dissuade employees from seeking other forms of motivation especially as the working conditions keep on changing. Indeed, an element of surprise should be incorporated in any motivational scheme. Employees have been found to be thrilled by surprise rewards.

5.) Goals should be achievable. If goals can not be achieved, employees tend to give up or relax regardless of the rewards promised.

6.) Should not be easy to manipulate. Employees will always try to beat performance measures once they see the slightest opportunity to do so.

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