Managers and business owners know the importance of employee motivation to the success of their business. To that extent, they seek to understand it better for mutual success. Gateth R. Jones and Jennifer M. George, in their book entitled "Contemporary Management," define employee motivation as a combination of "psychological forces, which determine the direction" of an employee's behavior in an organization (Consador 2013)." They also describe it as an employee's "level of effort and of persistence" in his performance of tasks. The authors point to the combined directions of behavior, effort and persistence as the key factors. Motivated behavior may be intrinsic or extrinsic. Intrinsically motivated behavior performs tasks for their own sake and the source of the motivation is the performance of the task itself. Extrinsically motivated behavior performs tasks for material or social rewards or to avoid penalty for the omission (Consador). It is well-known that an organizational culture that rewards exemplary performance motivates employees to achieve or do their best (Lindblad 2013). This is done by implementing an adequate motivation and reward system. It is a way of formally acknowledging the accomplishments of employees and showing their importance to the company (Lindblad).
Rewards that Satisfy
Experience and experiments identify the factors, which make up employee satisfaction in the rewards given (Newman 2009, 2013). The input is comparable to the output. The reward is comparable to what is expected. The reward fairly compares with that of other employees who achieve and are rewarded for similar tasks. The correctness of the employee's perception of the rewards of other employees previously given is another factor. Misperception occurs because management does not reveal the confidential salary or performance of others who have been previously rewarded. And overall satisfaction comes from combined intrinsic and extrinsic rewards (Newman).
Employers give rewards to motivate employees perform better (Newman 2009, 2013). A management theory suggests certain conditions as necessary to employee motivation. One is that employees must believe that effective performance will reap certain rewards. Another is that those rewards are attractive or worth pursuing. And another is that a certain level of effort will achieve the organization's standards of effective performance. Receiving money, recognition, promotion or some other reward can follow exemplary effort. This motivation inclines an employee to perform better to receive these rewards. When this occurs, the employee becomes satisfied and more motivated to perform again and better (Newman).
Criteria of Effective Rewards
Knowing what rewards improve performance and enhance better productivity is the foundation of a workable rewards system (Accel 2013). They are part of good management, not a substitute. Effective rewards should be quick, significant, irrevocable, compatible with job performance, and the goals must be known, understandable and attainable by all employees. If they see that the reward plan is unfair or unrealistic, such as promoting on the basis of seniority or favoritism, it will produce the negative effect of reducing motivation. Rewards should be so structured as to balance goal and effort (Accel).
Financial rewards are classified into profit-sharing, job evaluation and merit rating (Accel 2013). Profit-sharing may be on macro or micro basis. It is macro-based if it relates to the entire company and micro-based if confined to a particular activity or product or service. Job evaluation involves job factors, such as working environment; physical characteristics, mental characteristics, extent of responsibility, and training and experience. Managers are evaluated according to responsibility, expertise, and human relations. Merit training rates the employee as excellent, good, average, or poor as to their abilities. These abilities are communication, human relations, intelligence, judgment and knowledge. The problem is that rating tends to be done mechanically, with heavy bias on the past of the rater. Or he may not be objective or play favorites (Accel).
A Employee Reward System and Organizational Performance
Training specialist Sherry Ryan of the Weyerhaeuser Company pointed to recognition and rewards as powerful tools of employee motivation (Nuri 2013). Recognizing employee achievement and adequately rewarding it benefits the company a number of ways or forms. These are the system can help achieve company goals. They can retain employees. They help create a talented workforce. And they add flexibility and increase company effectiveness (Nuri).
Help Attain Organizational Goals
As long as these goals are clearly defined by managers and understood by employees and aligned with the rewards system, repeated and improved performance can be attained (Nuri 2013). The reward systems should, however, not be based on seniority but on all staff levels in order encourage total employee participation (Nuri)
Enhance Employee Retention
Both tangible and intangible forms of reward, such as cash bonuses or gifts, can make an employee feel appreciated (Nuri 2013). Recognition and appreciation assert greater influence on motivation and performance than salary increases (Nuri). They strongly enhance loyalty.
Create a Talented Workforce
Rewarding employees in either tangible or intangible form benefits both the employee and the company. But instead of promoting them, the company can help employees develop their proven professional skills for their own growth. At the same time, it creates an organizational culture of a talented workforce (Nuri).
Achieve Greater Flexibility
Employee reward systems contribute to company flexibility and effectiveness (Nuri 2013). Motivating employees through a bonus system benefits them more directly. At the same time, it increases company performance. It an also use these bonus systems during its growth and rapid change. Bonus systems can help attain short or long-term company objectives and market shares (Nuri).
Employee Motivation and Organizational Performance
Employee motivation asserts a decisive effect on company stability, productivity, reputation and future trends (Williams 2013). What employees feel about their work and its results affects the performance of the business and, in the long-term, its stability. Highly motivated employees will do everything they can to achieve the objectives of the organization. This includes rising to any challenges confronted by the business. The opposite is true. Employees with low morale and motivation will easily succumb to internal or external vulnerabilities or challenges. They will not exert effort to support the organization. Eventually, the organization's overall performance is adversely affected and becomes unstable (Williams).
Insufficient motivation leads to less accomplishment or low-level productivity (Williams 2013). Employees who are not too motivated usually show this condition in other ways. They take longer when engaging in personal chats, internet surfing or longer breaks. These interruptions waste company money and mean reduced productivity. Both slow down organizational performance and hinder future success (Williams).
The low level of motivation among employees may also be a consequence of the company's loss in competitiveness, economic crisis, or any change or uncertainty within the organization (Williams 2013). Whatever the cause, words that spread around about an unbalanced work environment because of low employee motivation and morale will project an unpleasant image and feedback about it among potential clients and partners. A reputation of this kind can impair its future chances in the industry. And a slow-moving business is able to reach its clients, operating and developing for a future at only a fraction. The management needs to come to terms with reality and to improve performance, mainly by cultivating employee motivation and morale (Williams)
The formation of problem-solving teams is one mechanism, which has been adopted to increase employee participation and involvement in solving problems (Kerrin & Oliver 2002). These teams observe accountability for their production process within their work unit. This is seen to increase their sense of responsibility for the problems, which develop within their unit. Using problem-solving teams in a UK automotive component company in a study, results showed that a combination of the individual and group-based incentives will be more effective in motivating employees in the individual level and the cooperation of their total cooperation at the team level than multiple reward practices (Kerrin & Oliver).
Psychologist Abraham Maslow proposed that human beings are motivated to fulfill their basic needs for survival before higher-level needs (Ray 2011). Offering monetary rewards will fill survival needs. At the same time, it provides the basis for goals, which will bring less immediate and less tangible rewards, such as praise, self-esteem and a sense of achievement. Companies should connect their goals to rewards, which will motivate employees to become productive. External motivation can be in the form of rewards connected to employee needs they themselves determine. Employees thus also participate in the goal-setting process (Ray).
This is one of the most-accepted forms of motivation today (Ray 2011). It is a tool, which businesses can use to improve organizational management, employee morale and retention. Goals must be specific, in written form, and understandable to employees. They should also be measurable, relevant to employees and set for achievement at a specific schedule. It is of utmost importance that employees participating in the process easily recognize these specific goals, such as sales goals. Bonuses and rewards should also be clearly explained (Ray).
Managers should expect that not all employees will attain established goals (Ray 2011). Smaller rewards should be given and motivation should be increased. Motivation in sales, for…