Monetary Rewards On Employee Performance Commerce Essay

Monetary Rewards On Employee Performance Commerce Essay Workplace performance motivators contain both monetary as well as non-monetary rewards. Monetary rewards may be varied whereas having a same effect on workers. This study aims to investigate the impact of monetary and non monetary rewards for the performance of employees in a company. Monetary reward in modern society is the most transferable means of satisfying fundamental requirements (Kohn, 2009). Physiological satisfaction, protection and social requirements may only be attained with money. The impact of non-monetary rewards on performance entails that control systems may be more efficient and competent by taking into consideration non-monetary rewards. Particularly, logical justifications help organizations by motivating better performance than illogical explanations and by raising the recognized justifiability of bonuses when the bonuses stand for the significance of the jobs The study will recognize the performance of employees and its relation with monetary and non monetary rewards, if any which are presently militating against the smooth functions of the company in area of its job performance and efficiency that management find helpful for future development. Table of content Introduction 1 Hypothesis 1 Research Questions 2 Aims and objectives 2 Literature review 2 Methodology 6 Discussion 7 Conclusion 8 Reference 10 Introduction Managers are always looking for ways to create a motivational environment in which associates (workers) to work at their best levels to achieve organization goals. Workplace performance motivators contain both monetary as well as non-monetary rewards. Monetary rewards may be varied whereas having a same effect on workers (Lynch, 2003). An example of monetary rewards is mutual funds given by organizational pension plans or insurance programs. As it has been proposed that employees, depending on their age, have diverse requirements relating to rewards, traditional rewards packages are being changed with alternatives for attracting younger employees (Nelson, 2009). This study aims to investigate the impact of monetary and non monetary rewards for the performance of employees in a company (Kohn, 2009). The study will also emphasize the importance of monetary and non monetary rewards in the organization. It is expected that this study will help business enterprises in their functions as well as facilitate them to use rewards schemes which would optimize the output and performance of their business functions (Zigon, 2008). The study will recognize the performance of employees and its relation with monetary and non monetary rewards, if any which are presently militating against the smooth functions of the company in area of its job performance and efficiency that management find helpful for future development (Kepner, 2010). Hypothesis Hypothesis has been formulated below: Organizations monetary and non monetary rewards programs have a huge impact on the employees job performance as well as the productivity and development of the company. Research Questions To what degree is the efficiency, adequately relevance of these rewards to the whole performance of employees? To what degree are these different kinds of rewards set up by the companies? To what extent is the rewards bring about achievement of job satisfaction and motivation of the employees? How management may use rewards to persuade workers to improve and increase productivity? What are the rewards considered by employees to be non-monetary rewards? Aims and objectives To look at the extent to which these rewards bring about achievement of job satisfaction and employees performance. To analysis the efficiency, adequacy and significance of these rewards programs to the overall performance of individual employee or group of employees. To inspect the extent the company is attaining its goals for administering these rewards. Literature review People work so as to satisfy their requirements and these requirements may be met by monetary rewards. Monetary rewards are refund in cash and in form of money for a given work done by workers in the company (Hansen, 2010). Workers would go any level to enhance their cash income as they will do something to avoid their source of income from being removed. The fact that workers fear to lose their jobs, cash has been a very efficient motivator only because money is necessary for continued existence in an economy (Dunham, 2009). Monetary reward in modern society is the most transferable means of satisfying fundamental requirements (Kohn, 2009). Physiological satisfaction, protection and social requirements may only be attained with money(Kepner, 2010). The effort-to-performance expectation is sturdily persuaded by the performance assessment which is frequently part of the reward system. A worker is probable to use extra effort if he or she understands that performance will be assessed, appraised, and rewarded. The expectancy of performance-to-outcome is influenced by the level to which the worker thinks that performance will be followed by rewards (Allen, 2007). Lastly, every reward or potential reward has to some extent different value for every individual. An individual can want a promotion more than reimbursement; somebody else can want only the opposite (Nelson, 2009). When a company rewards a whole work group or team for its performance, collaboration among the members typically enhances. Though, competition among different teams for rewards may cause decline in whole performance under definite situations. The most general team or group rewards are plans of gain sharing, where worker teams which meet certain objectives share i n the gains measured against performance targets (Shutan, 2010). Frequently, programs of gain sharing emphasize on quality enhancement, reduction of cost, and other quantifiable results (Kepner, 2010). Despite the positive role monetary rewards have played, employees have a tendency to have different approach and a manner towards money rewards (Hansen, 2010). The most general of the different reaction to salary and wages by employees is that once it crosses lowest levels, it is regarded as a measure of fairness. (Kohn, 2009) posited non-monetary rewards as extreme benefits made accessible to staff and are regarded as an addition to salaries and wages. It contains direct as well as indirect reimbursement (Shutan, 2010). The direct reimbursement can contain profit-sharing, illness pay, pension plans, and so on (Kerachsky, 2009). The indirect reimbursement can include welfare services, social as well as recreational facilities, etc. Pay, if merely it could be correctly packaged would someway lead to the desired approach to work. Perception of employee of his pay with respect to other employees of same position could influence the satisfaction, which he obtains from the job. The aim of monetary rewards is to reward workers for outstanding performance through money (Nelson, 2009). Monetary rewards contain profit sharing, stock options, and project bonuses, scheduled and warrant bonuses (Allen, 2007). The aim of non-monetary rewards is to reward employees for brilliant job performance by opportunities. Non- monetary rewards contain training, flexible work hours, satisfying work environment and vacations. Employees encounter issues, disturbances, and dissatisfactions in their environment of work where certain rewards are de-emphasized. So as to increase and improve the rewards of employees, trade unions serve as a way of developing the terms and conditions for workers, enhance rewards rates, raise employees status, protect members against unjust practices and also struggle for protection of service (Kepner, 2010). Trade union Act 1990 offers that worker has a right to get all employment benefits which are stated in documents of service, containing the offer letter, and the condition of service and in joint agreement (Kerachsky, 2009). A stability of monetary and non- monetary rewards must be employed to satisfy the different requirements and interests of workers. Monetary rewards persuade fulfillment rather than risk taking since most rewards depend only on performance and discourage workers from being innovative in their place of work. Apart from these kinds of strategies of performance, reward system of an organization is its most fundamental tool for dealing with employee performance (Allen, 2007). Reward system of an organization is the formal as well as informal systems by which workers performance is described, assessed, and rewarded (Kohn, 2009). Organizational reward may influence performance, manners, activities, and motivation. Therefore, it is significant for organizations to recognize and appreciate obviously their significance. Though employee attitudes like satisfaction are not a main determinant of job performance, they are however essential (Kepner, 2010). Extrinsic rewards affect satisfaction of e mployee, which, sequentially, plays a chief role in verifying whether an employee reward system (Zigon, 2008). The formal and informal systems by which performance of employee is identified, appraised, and rewarded will remain on the job or search for a new job (Kerachsky, 2009). Reward systems also affect patterns of attendance and absence; if rewards are based on real performance, employees have a tendency to work hard to get those rewards. Methodology This chapter contains imminent into the research design and strategy for the study. It emphasizes on what to study, how to study and when to study; the main objective of the study is to monitor the management of total quality and examine techniques in business environment. Research Design Basically, field study approach survey will be applied for this study due to its weird nature. Though, questionnaires will be the main tool to collect data for this study. The questionnaires will be prepared carefully and simply designed so as to make sure simple answering; to get reliabilities in responses of respondents and at same time to remove uncertainty and suspension. Meanwhile, secondary research will also been used in this study. Secondary research is frequently less expensive than surveys and is very efficient in getting information regarding communications needs of peoples and their responses to and vision about particular communications. It is frequently the technique of choice in cases where quantitative measurement is not necessary. Sample and sampling techniques Therefore, the sample techniques will consider thirty (30) employees randomly selected from a reputed organization. Data Collection The major process for data collection of this study is through questionnaires; the ordered questionnaire will be distributed to the randomly selected employees. Literature Selection Criteria The literature selection criteria are twofold: significance and the year of publication. Search Technique Libraries containing online databases are accessed to obtain the most appropriate and updated literature. Some of the online databases which are used include: EBSCO, Emerald, Blackwell, and so on. Theoretical Framework For this study as already said the secondary research technique is used and all the relevant data was gathered through books, journals and articles. Discussion The non-monetary rewards like training and development in a company have positive impacts on employee performances, work, and a company can minimize cost as well as boosts efficiency; good working environment in a company will also get better employees performances (Kohn, 2009). Monetary and non-monetary rewards differ in their roles, efficiency, and suitability, depending on the kinds of rewards (Allen, 2007). Rewards in fact hamper employees and organizations by reducing employees motivation, job satisfaction and interest. This is only the opposite of what rewards were made to do. Rewards should consider the employees for whom they were made (Kerachsky, 2009). A balance between monetary as well as non-monetary rewards must be employed for satisfying the diverse requirements and interests of employees. Creating a balance sheet is an easy exercise which may be used to evaluate rewards programs. On one side of the balance sheet, list each and every rewards program (both monetary plus non-monetary) of the company (Kohn, 2009). On the other side list all the results (whether preferred or not) which may be attributed to these rewards. Areas of development and enhancement would be those outcomes and results recognized as undesirable (Zigon, 2008). Promoted workers will amplify his/her efforts as well as performances in work place and assessment of employee performance manipulates employees performance; welfare of employee, pension, and medical facilities also helps successful performances, finally the employees prefer monetary rewards to non-monetary rewards (Kepner, 2010). Individual performance is usually found out by three things: motivation (the wish to do the job), capability (the ability to do the job), and the environment of work (the resources required to do the job). If a worker lacks capability, the manager can give training or replace, the employee. If there is a resource issue, the manager can do it correct (Kerachsky, 2009). But if motivation is the issue, the job for the manager is more challenging. Individual performance is a multifaceted fact, and the manager can be pushed to understand the specific nature of the issue and how to resolve it (Kohn, 2009). Hence, motivation is significant due to its importance as a determinant of performance and due to its intangible nature (Kerachsky, 2009). Many special rewards programs which offer awards to individuals have been utilized, ranging from one-time contests to meet performance targets to rewards for performance eventually (Hansen, 2010). Though special programs can also be built up for groups and for whole companies, these programs frequently emphasize on rewarding just high-performing individuals. Conclusion The outcomes of this study make three contributions. Primary, this study contributes to the logical and experiential literature on multi-action settings by giving facts about the impacts of non-monetary rewards (Kohn, 2009). The impact of non-monetary rewards on performance entails that control systems may be more efficient and competent by taking into consideration non-monetary rewards. Particularly, logical justifications help organizations by motivating better performance than illogical explanations and by raising the recognized justifiability of bonuses when the bonuses stand for the significance of the jobs (Nelson, 2009). While logical explanations is unsuccessful to stimulate better performance than when no justification is given, this result must be understood carefully as the explanation also gives related information which is not present when no explanation is given, that can not be true in all settings (Kepner, 2010). The study thus concludes that there are obvious relations between monetary rewards and employees performance; fringe benefit can stimulate employees performance (Kohn, 2009). Though, some of the major goals of training employee contain, increase in production, lesser labor turn over rate, higher confidence and better management and training facilitates to decrease cost as it enhances productivity, and promotes objective congruency. Lack of training raises rate of absenteeism, low productivity, bad quality and refuses and results in high unit cost. Non-monetary rewards, good working environment promotion, better management, employees welfare, programs, medical facilities, pension, helps increases in performances of employees and employee desired monetary rewards to non-monetary rewards.