How to Best Reward Employees

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|Sheffield HAllam | |How to best reward employees? | | | | | |Yuling Zhang(19041245) | |2010/4/17 |

|Understanding and Managing Organisations |

Contents
Contents2

Introduction:3

Total Reward and theories:4

Intrinsic rewards more important:5

The impacts of extrinsic rewards on intrinsic motivation:6

Cognitive evaluation theory (CET) in motivational approach:6

Self-perception theory in attributional approach7

Behavioural approach:7

Performance management, high performance working and reward strategy:8

Other noteworthy points when rewarding:9

Case study:10

Conclusion:11

Reference:12

How to best reward the employees?

Introduction:

Given that people is highly emphasized on as a key element of an organisation's competitive advantage, pay sometimes function as a tool to exchange for talented employee's commitment and loyalty. It has been pointed out that reward systems can affect several human resource processes and practises, and further influence organisational performance through mediators such as recruitment, retention and motivation (Marchington and Wilkinson, 2008: 462). Since the 1980s, performance-related pay (PRP, also known as variable or incentive pay schemes) which is related to performance management has raised growing awareness (Leopold and Harris, 2009: 223). It was frequently coupled with basic salary to reward employees. In addition, the association between reward management and organisational performance has contributed to the concept of 'New Pay', which highlights about aligning the payment levels and reward systems with the organisation's goals (White and Drucker, 2000). However, to what extent can rewards boost performance is not solely hinged on money now. Other intangible rewards such as recognition, self-development, personal achievement and social contacts have also been valued by many employees who tend to be motivated intrinsically by the work itself. These intrinsic motivations are not directly associated with management behaviours, but scholars have studied the relationship with extrinsic rewards. It is worth considering to integrate the extrinsic rewards and intangible rewards to best reward their employees and thus increasing the organisational performance. In this essay, we will begin with an overview of total reward to give evidence for the existence of intrinsic rewards, and then elaborate the interactive of extrinsic rewards and intrinsic motivation. Performance-related pay will be followed to illustrate the link between rewards and performance. After supplementing some points worth considering in rewarding employees, two case studies will be put forward to further elucidate the arguments and help draw the conclusion.

Total Reward and theories:

According to Herzberg's two-factor theory of motivation and job satisfaction, salary is included in hygiene factors which serve to avoid dissatisfaction. The other set of motivators factors considered to contribute to superior performance are related to the job...
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