Rewarding in to improve productivity

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The competitive environment in the manufacturing world has forced companies to keep their production efficiency at the highest level. Companies invest a lot of time in increasing employee productivity and performance. Hence, the objectives set by the company will be achieved automatically. Reasonable compensation will consist of both intrinsically and extrinsically rewarding systems in which extrinsic and intrinsic motivation would be simulated in the employee (Ngwa, et al., 2019). Intrinsic rewards take place within the job or task assigned to the employee. Further extrinsic rewarding occurs without relation to the job as an external factor. As stated by (AGBAEZE & EBIRIM, 2020), rewards associated with;

·       Pay, Salary incentives and bonuses

·       Work condition improvement and a healthy work environment

·       Fringe benefits

·       Security

·       Promotion

·       Control of service

·       Intangible factors such as praise or public recognition can be used as rewards

Result Rewarding employees upon performance has been widely used to stimulate performance. Intrinsic could be the payment of premium salary or other packages, and extrinsic rewards are rewards done by the organisation to show employees' value toward the company, such as vacation and other materialistic rewards other than financial awards (Hatice, 2012). The following method of enhancing performance has been studied throughout many institutions globally. It is known to be the most effective mode to improve performance. However, the reward can happen in two ways: first, it simulates mental satisfaction, and second, it is a reward of worldly matters such as financial rewards to hold the employees' lifestyle up.  One could relate to the theory of Maslow’s Hierarchy of needs to understand the most effective method of rewarding companies where the approach highlights the factors that will motivate the employees. Which could be staged into five segments in a pyramid-like structure according to the hierarchy of human needs. (Saul, 2023). As a result of a well-motivated workforce, the organisation will consist of employees performing well by manifesting the organisation’s effectiveness. Therefore, the individual will be more focused on developing work to be done about the employee’s behaviour, knowledge, skill and ethics. However, Reward systems should be determined at the organisational level rather than by individual managers, which may lead to other conflicts.

Looking at Maslow’s hierarchy of needs, it could be implemented effectively to generate the highest productivity and performance.  The lowest level is physiological needs, which address the essential requirements of a human, such as food and shelter. It could be seen from studies done by researchers in developing countries and third-world countries that the most common rewarding method is based on physiological needs. (Saul, 2023) also, it is the most crucial aspect to be looked after in humans. However, with the development of an economy in a country and the employees, it is essential to identify where the employee is unsatisfied with the basic needs of the physiological stage. The requirement to move on to the next level is safety and security. This covers security in all aspects of the employee;

1.       Emotional security

2.       Financial security

3.       Law and order

4.       Job security

5.       Social stability

6.       Property

7.       Health and wellbeing

The next level to ensure is Love and Belongingness, which stimulates emotional need and relates to interpersonal relationships and affiliating connectedness. This type of simulation creates a significant impact on humans. However, a higher-ranking person will require rewarding stimulation from esteem and self-actualisation. This increases the feeling of prestige compared to others in society and unleashes their fullest potential, including in the decision-making process (delegation).

according to (Ngwa, et al., 2019) employee performance is directly related to rewards on studies done in African organisations. The author also highlights several studies supporting the same hypothesis where intrinsic and extrinsic reward plays a huge part in employee performance and further states that more frequent reward reflects higher performance. The paper further states companies could achieve performance targets by using Profit sharing, flat rate systems, and collective bargaining to recognise and praise employees. Sharing profits or retained earnings can also be a powerful incentive to stimulate stellar performance. Frequent rewards, such as praise and recognition in newsletters or meetings, can also greatly enhance employee performance. This can involve tailoring rewards to individual employees based on their preferences or incorporating joint discussions or collective bargaining to address potential conflicts. Additionally, managers must be vigilant in identifying high-performing employees and rewarding them appropriately to maintain employee motivation and commitment. Main factors are looked into in rewarding schemes (AGBAEZE & EBIRIM, 2020)

1.       Base Pay: Fixed Salary for a job. This pay is based on job grade and the relative importance of the job role to the company. To give the optimal reward, HR teams should actively research the market rate, ensuring that the best compensation is given to their employee.

2.       Contingent Pay: Monetary incentives to employees based on their contribution, performance, and additional skills brought into the company by the employee; therefore, this is known to be variable pay.

3.       Employee Benefits: Employee benefits include pensions, sick pay, insurance coverage for company cars, and other pecks. They consist of remuneration and other forms of cash pay, including the provisions enabling the employees to be strictly reimbursed in relation to annual holidays.

4.       Non-financial rewards and Performance Management: Non-financial rewards include achievement, autonomy, recognition, skill development, training, career growth prospects, quality leadership, performance management, and customer feedback.

5.       Total reward: Total rewards include direct and indirect compensation, such as base pay and benefits, all treated as a single entity.


References

AGBAEZE, K. & EBIRIM, O. C., 2020. REWARD SYSTEM AND ORGANIZATIONAL PERFORMANCE IN THE MANUFACTURING INDUSTRY IN SOUTH-SOUTH NIGERIA. International Journal of Management, Social Sciences, Peace and Conflict Studies, 3(4), pp. 241-254.

Hatice, Ö., 2012. The Influence of Intrinsic and Extrinsic Rewards on Employee Results: An Empirical Analysis in Turkish Manufacturing Industry. Business and Economics Research Journal, 3(3), pp. 29-48.

Ngwa, W. T. et al., 2019. EFFECT OF REWARD SYSTEM ON EMPLOYEE PERFORMANCE AMONG SELECTED MANUFACTURING FIRMS IN THE LITORAL REGION OF CAMEROON. Academy of Strategic Management Journal, 18(3), pp. 1-16.

Saul, M., 2023. Maslow’s Hierarchy Of Needs. [Online]
Available at: https://www.simplypsychology.org/maslow.html
[Accessed 23 November 2023].

 





Comments

  1. Dilshad Banu MohideenNovember 25, 2023 at 9:05 AM

    Rewards system may increase short term productivity. However, there is potential for unfairness and resentment if perceived as unfair if they are not administered consistently or if employees feel that their contributions are not being recognized adequately. This can lead to dissatisfaction among employees, undermining morale, and teamwork. Rewards system also increases costs and administrative burden on the organization.

    ReplyDelete
    Replies
    1. Dushantha SamarasingheNovember 28, 2023 at 1:20 AM

      I agree with your perspective on reward systems. While they may provide a short-term boost in productivity, there is always a risk of creating an environment of unfairness and resentment among employees. However, I believe that if implemented and managed effectively, reward systems can be an invaluable tool for achieving long-term success. One crucial factor is to ensure that the rewards are tied to specific, measurable goals and that the administration process is consistent and fair. Furthermore, it's important to recognize employees in ways beyond just monetary rewards, such as providing opportunities for growth, offering flexible work arrangements, and fostering a positive work environment. By creating a culture of appreciation and recognition, organizations can promote employee satisfaction, engagement, and productivity over the long haul while simultaneously preventing burnout.

      Delete
  2. MAHESH KULARATHNADecember 10, 2023 at 1:08 AM

    Reward system is good to improve morale of the team, Motivation of the employees. Currently various rewards are available to employees, including salaries, bonuses, and long-term incentives. A good rewards strategy is a key component of a company's human capital strategy. Rewards is the one of the best way to recognition of their performance and contributions to the organization. When employees are rewarded for their efforts, they are likely to become more loyal and productive. This can boost the overall productivity and output of the organization.

    ReplyDelete
    Replies
    1. Dushantha SamarasingheDecember 14, 2023 at 6:25 AM

      Thank you for commenting. I agree with your statement rewarding will have a significant impact on employee motivation and have a effect on the productivity of the organization.

      Delete
  3. T. Yohani ThathsaraniDecember 18, 2023 at 6:18 AM

    I agree with you. Rewarding employees can make them motivated and increase their performance as well.

    ReplyDelete
    Replies
    1. Dushantha SamarasingheDecember 18, 2023 at 6:52 PM

      Thank you for commenting! Even though Rewarding brings a positive impact towards employees. The organization's academics have always found that organizations find it difficult to identify the right reward system personalized to each employee. Given this reason, according to Maslow’s Hierarchy, most employees are unhappy with the rewards and find themself not motivated.

      Delete
  4. Rehana UvaisDecember 20, 2023 at 3:43 AM

    As you covered in the article, autonomy is one of the key factors to improve productivity in individuals. While it has no monetary benefit, autonomy gives that boost necessary to convert a moderately engaged or low engaged employee to move up to possible a 'highly engaged' employee.

    ReplyDelete

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