Rewards motivate employees by increasing job satisfaction, commitment, and productivity in the organization. Rewards have been shown to increase productivity by 20 to 30 percent. Award distributions should be situation-dependent, equitable, immediate, and should be targeted toward teams. A variety of reward types should be used because different people have a different value system. One study showed that when firms offered monetary and non-monetary rewards they had productivity increase 17 percent. A large study on management also found that 50 percent of middle managers do not believe pay is tied to performance. Healthcare leaders should be aware of the appropriate method of award distribution; healthcare is being run more like a business and the retention and increased productivity of the employees is critical toward maximizing organizational efficiency.
Imagine you are months from completion of a Masters degree in Healthcare Administration and are on the verge of interviewing for leadership positions that will utilize the knowledge gained. In your leadership class you were taught that motivating employees is very important and the offering of rewards is one way to motivate. You have managed people before but were not sure how to properly reward their performance. There is a desire on your part to prove the worthiness of the degree and demonstrate to your prospective employers that significant knowledge was gained in the program. The purpose of this paper is to discuss why rewards act as a motivator and what employee rewards should be used for increased employee performance in healthcare organizations. Why Rewards Should Be Used
The current environment of rising healthcare costs and fierce global competition necessitates that healthcare leaders be able to motivate employees to maximize resources. Healthcare costs are rising at a rate higher than inflation, reaching $2 trillion in 2004 (Abelson, 2005). One such example is the soaring cost of medical devices. The rise in medical devices is the primary reason hospital care has become the largest component of the nation's annual health bill. Healthcare providers are the ones who outfit patients with these devices, prescribe medicines, and treat patients. Today's health care providers face expanding workloads, fewer resources, greater patient expectations, increasing threats (e.g., malpractice lawsuits), and closer scrutiny, especially from third-party providers. The art of healing has been transformed into a business, with a push for the efficient use of dollars by all parties. The rise of prices and managed care leave most consumers with a small range of healthcare options, but those alternatives present the consumer with choice. Therefore, it is important as a healthcare administrator to have a motivated and effective workforce to encourage the patient to continue using that facility and its doctors. The global issue is how to get the health industry to become more effective and efficient in the use of its resources. One way to do that is by motivating the human capital through the use of rewards.
The eventual success of a corporation lies more in its intellectual and systems capabilities, or human capital, than in its physical assets (Pfeffer & Veiga, 1999). The culture and capabilities of an organization, derived from the way it manages its people, are the enduring sources of competitive advantage. Today's leaders must begin to take seriously the adage that people are the most important asset. Current research increasingly points to a direct relationship between an organization's financial success and its commitment to management practices that treat people as assets (Smith & Rupp, 2003). Argyris (1964) went so far as to declare that an organization's main source of energy derives from the individuals within that organization. The same techniques that work elsewhere in business can bring success in medicine,...
References: Abelson, R. (2005, November 18). Dr. saves-a-lot. The New York Times, pp. C1, C5.
Accel Team 2005. Employee motivation, the organizational environment and productivity.
Retrieved November 20, 2005, from http://www.accel-team.com/productivity/
Adams, J. (1965), Inequity in Social Exchange, Academy, New York, NY.
Argyris, C. (1964). Integrating the Individual and the Organization, John Wiley & Sons, Inc,
New York, NY.
Bain, D. (1982). The Productivity Prescription, McGraw-Hill Book Co., New York, NY.
Brudney, J., Condrey, S. (1993). Pay for performance: explaining the differences in managerial
Cacioppe, R. (1999). Using team – individual reward and recognition strategies to drive
Coli, M. (1997), Strategic team reward and recognition strategies at Motorola, The Best of Team
Conference Proceedings, Linkage Inc., San Francisco, 519-605.
Eade, D. (1996). Motivational management: Developing leadership skills. Clinician Reviews, 6,
Facendini, Y. (2003). Tapping into power: Motivation in the workplace.
Luthans, F., Stajkovic, A. (1999), Reinforce for performance: the need to go beyond pay and
Macaulay, S., & Cook, S. (2001). Rewarding service success. Measuring Business Excellence, 5,
Maslow, A. (1971). The Farther Reaches of Human Nature. New York: The Viking Press.
McNeese-Smith, D. (1999). The relationship between managerial motivation, leadership, nurse
outcomes and patient satisfaction
McNeese-Smith, D. (1995). Job satisfaction, productivity, and organizational commitment: The
result of leadership
Pfeffer, J., Veiga, J. (1999), Putting people first for organizational success. The Academy of
Management Executive, 13, 37-48.
Pfeffer, J., Veiga, J., Hatano, T., Santalainen, T. (1995), Producing sustainable competitive
advantage through the effective management of people, The Academy of Management
Smith, A., & Rupp, W. (2003). Knowledge workers: exploring the link among performance
rating, pay and motivational aspects
Thomas, K. (2000). Intrinsic Motivation at Work. San Francisco: Berrett Koehler
Please join StudyMode to read the full document