Reward System to drive Sustainable Business and Individual Performance By Rimsha Kamran

Link between competitive reward system and high performance

 There is definitely a positive relation between reward system and high performance. Reward system in organization is mainly used improvement in performance. Generally rewards serves as motivational function for employees. Organization reward employees with tangible things, on the other side, some organization prefer to reward top employees by intangible reward i-e by praising them (UKESSAYS, 2015). According to the research, reward system have huge impact on productivity of employees, it can create a sense of satisfaction in them. And not having any reward system hinders employee’s performance and satisfaction within the organization (Truskey, 2020).

Influence on Job performance:

It is proven that employee effort towards job increases when he felt that reward is linked with job performance. Competitive reward system increases attendance and retention of employees. It influences directly on their decision to come at time to work hard and to be the part of organization with heart. Reward system also increases employee’s commitment to the company or organization, which directly affects on job performance of employees.

Employees get emotional attach with organization when they noticed that organization is interest in their welfare. This can increase commitment of employees towards organization. Reward system also increases the job satisfaction among employees, which increases their job performance. Reward systems to employees are satisfying because reward leads to other rewards. Employees also feel overwhelming after receiving rewards for the work they have done. It is also true that the many individual’s only joins the organization by influenced by the rewards according to them to be available in that organization. So reward system also influences the choices for occupational and organization. The success of every organization depends on the productivity of employees. Productivity of employees depends on their level of job commitment.

In 1987, Frederick Herzber carried out study about the factors that cause satisfaction in employees. He wrote in his book (The Motivation to Work), That achievement, recognition, work itself, responsibility, advancement and growth leads to satisfaction in employees which increases their productivity level. Reward system is important in order to create a successful organization. Reward gives greater sense of responsibility to employees about their job (Callahan, 2017)

In 2012, Armstrong said that reward system is used to attract the skilled people in organization and to motivate individuals to deliver their best accomplishment to organization.

Strategic reward system:

In organization, reward system consists of financial rewards (compensation) and non– financial reward. To increase the productivity of employees, it is important that there should be a consistency with other Human resource systems as it a key driver for business culture and HR strategy. There shouldn’t be any inequality in reward system. Inequality in reward system can lead to reduce productivity in employees. Those employees try to influence managers and co-worker performance by criticizing their outputs or file grievance (Holostik, 2010). Strategic reward system is how company’s policies can help to reach the goal of its business objective. It covers all reward, tangible or intangible. Strategic reward system helps in supporting long-term sustainable business (Cotton, 2020).

There are different types modes of reward system to enhance the individual high performance. There are financial and non-financial rewards. Following are ways to reward employees beyond their regular paychecks in order to drive their performance.

Financial reward:

Reward rewards are those in which there is money payment included.

Bonus: Bonuses in an incentive or reward give to employees for their extra effort and hard work. It is connected to their high performance within the organization. Managers normally motivate their employees by promising a bonus pay for their high performance. Bonuses are given to employees to maintain their effort in organization.

 Allowance: Allowance is different from regular paychecks employees receive by working; allowance is getting on regular schedule.

Pensions: Pension is whom those people who work hard for an organization for long time and after they get retire and no longer earning regularly from employment.

Gifts: Rewarding employees with gifts helps them to make extra effort to attain their goal. Gift cards or gifts can be given to team unit or individuals.

Non-financial rewards:

Non-financial rewards involve the non-monetary incentives. These are also important to motivate employees for high performance.

Job security: Job security makes employee more motivated to work harder and put greater efforts.

Recognition: Recognition helps to motivate employees to maintain the high level of performance. Recognition is necessary in order to motivate employees. Recognition pays an essential role in organization success. Organization can publically announce the names of best performer or they can publish names of employees on their website monthly. Companies also can create groups of high performers to recognize top performing employees.

Participation in decision-making: Participation of employees in important decisions of organization makes them feel important part of organization, which motivates them towards high performance.

Competition: A healthy competition between employees motivates them to work more and prove their capabilities. And the rack of employees according to their performance also helps in their high performance.

 Time off: This type of reward can provide extra relaxation and it motivates employees to work more harden after extra time off.

Effects of financial and non-financial rewards on employee’s performance:

•   The employees belonging to lower class families are more likely to motivated from financial reward for high performance than non- financial reward.

•   The employees that belong to elite class families are more likely to motivate from non- financial reward for high performance than financial reward.

•   Employees are highly skilled are likely to motivated by both financial and non- financial rewards.

•   Employees that are low highly skilled are also likely to be motivated by both financial and non-financial rewards (Bawalla, 2017).

The overall reason behind reward system is to motivate employees to work more hard. Reward system acts as a promise for high performance. Tesco is motivating its employees by communication and involving them in decision-making. Tesco also allow employees to enter in discussion about their pay rises. This step helps employees to know about how much productive they are to organization. This also helps in increasing their productivity level.

Reward system for individuals and group in organization:

According to the research, when a selfish individual become the part of group work, he also become cooperative. Organization needs to offer rewards like bonuses, recognition, and flexibility to entire group. And it is also important to provide individual reward in-group who makes top performance for team success (Harvard Business Review , 2017). Providing rewards to teams encourage them to reach the goals to succeed. Organizations are trying their best to provide compensation plans to team members and individual employees such as incentive pay, profit sharing and gain sharing (Northwestern, 2011). The incentives provides to employees by organization plays important role in their performance. In group work, incentives can motivate workers to do their best. When creating incentive compensation plans, it is important for the organization to observe that either group work or individual can thrive top performance (Bhaskar, 2017). There are many advantages for rewarding team member; it enhances teamwork with team recognition and bonding. Reward system for team members also increases motivation among employees. Star performer employees motivate and engage other employees in organization. Reward system for individual helps in creating a competitive environment in organization. A reward improves the performance, behavior and effectiveness in workplace (Mutwafy, 2016).

Companies using reward system to drive sustainable business and individual performance:

It is important for the business to have motivated employees to be successful. Organization chooses many different ways to motivate employees so they can attain their goals. That’s why organization introduced reward system to drive sustainable business. Reward system helps employees to perform better and it drives productivity. Reward system increases recognition among individuals. Reward system encourages employees to stay employees focused to drive sustainable business. Employees are more likely to contribute in organization’s success. Reward system drives success in organization by creating productive and dynamic work.

Importance of rewarding employees for sustainable business and employee’s performance:

All organization no matter how big or small it is, realized the importance of reward system to drive a sustainable organization. Almost many organizations believe that reward system yields powerful results by increasing motivation among employees. de-motivation among employees can damage work performance which ultimately drain efficiency in workplace. Rewarding strategies of organizations helps in motivating employees for performing their role consistently to build a sustainable environment. Reward system expands morale in employees. It boosts their confidence level to surpass their own standards of excellence to make organization more successful. After receiving reward for their work, makes them feel good and they feels like what they do for organization matters. In order to drive a sustainable organization, job satisfaction is important. So reward system promotes greater job satisfaction among employees. Organization never wants that their high performer leave their company for greener pastures. Rewards plays important role to keep employees feel appreciated so they are less likely to seek employment in other organization. Promotion of employees is also known as career advancement reward system. It is consider as a longer-term initiative that drives sustainable organization success. Career advance reward strategy is also considered as the win-win place for both organization and employees (Dagliyan, 2018). Organization also needs to work on longer- term goals, as they are more efficient in order to have successful organization. According to a research, employees are more likely to get motivated by moving up in a career instead of bonuses and extra time off. It is important for the employees to view reward as worth of their effort. This step is critical to ensure because it motivates employees to work even more hard (Geraghty, 2017). So managers need to carefully observe the input of employees and reward them accordingly. Organization also needs to make sure that employees fully understand how they can earn the reward. Employees should have comprehensive understanding of what organization is expecting from them, this helps them in achieving high performance level.

 Advantages of a Career Advancement Reward System in Individual performance:

·     Increase sustainability:

Career reward system increases sustainability. This reward system entails monetary gain among employees. it motivates employees to work more harder to maintain on this level.

·     Stability:

This type of reward also increases stability for individual performance. After getting great opportunity of increase in salary, individual is more likely to work hard. Reward systems helps getting best out of employees and improve relationship between employees and organization. Reward system also helps in decreases turnover rate and increases morale in employees that increases the productivity of employees. so competitive reward system is profitable for organization.

Google example:

Google reward strategy consider as best in world to drive business successfully and best employees performance. Google always claimed on top list on Glassdoor’s annual list of best places to work (Glassdoor, 2020). Google is also on top list on Fortune 100 and Business insider top 50 lists. With their excellent reward strategy, their business is running successfully and motivating employees for high performance.

In Google, they always try to recognize and resolve the issue. They try to make perfect the competitive reward strategies for motivating employees for high performance. 86% employees are satisfied with their job at Google. Employee satisfaction directly affects their productivity level. According to Laszlo Bock, Google reward strategy supports employees and create fun, hardworking and highly productive environment (Lindstorm, 2017).

 Experiences instead of money:

Google believe in provide experience that is non-monetary awards to their employees. Google previously offered cashes up to one million dollars to their employees for high performance (Petrone, 2015). But it caused jealously and resentment among employees. so they decided to provide new technology gadgets or trips to abroad. According to Bock, non-monetary reward provides different feelings to employees that help them to work even more hard.

Recognition:

Google provides recognition to employees for their hard work, which motivates to maintain same performance or do even better. Bocks said that the rewarding programs are less costly, but programs delight care for employees.

For individual:

Google uses reward program, where manager reward employees (spot bonus program) and employee recognize other employee (peer bonus reward). Google provide spot bonus program to employees for one time achievement. In this program, it can be monetary award or non-monetary recognition. There is a peer bonus reward program, where employees encourage recognizing other employee’s efforts. Any employee can nominate other employee using online internal tool for $175 rewards (See, 2015).

For group:

Reward system for groups helps in success of organization. Rewarding among group helps in bonding between employees. Google believes that teamwork is important for development of new ideas. Teamwork creates innovation and productivity. In Google, executives reward incentives to teams. It is named as “No name programs”.

Kudos rewarding system:

Kudos is a rewarding program where Google employees sent each other thank you notes without approval. It can convert from reward catalog into financial or non-financial. It increases productivity among employees for getting appreciation.

Google was facing many problems, such as loyalty and attribution. So Google introduced recognition program for employees who helps in motivation, satisfaction, increase productivity and improve overall organization perform. Compensation group at Google provides rewards and recognition program to meet the need of workforce.

Google compensation program known as “pay for performance”, It includes overcoming weakness by training program. Google uses OKR method that creates alignment in organization. The main goal of OKR is to make sure that every employee is going in same direction. Google rewards employees on the basis of percentage of achievement of OKR. OKR is really helpful in setting objective for employees. Quarterly and Annual OKRs is performance period. Every employee can access OKRs and view achievement of other co-workers. They can even view progress rate and achievement level of bosses.

OKR Reward system is beneficial for organization as it increases the productivity of employees as this system encourages them to outdo themselves. It also drives sustainability in organization as it strengthens collaboration between teams to reach at their objective (Primeum, 2018).

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