IMPACTS OF REWARDS ON ORGANIZATIONAL PERFORMANCE

IMPACTS OF REWARDS ON ORGANIZATIONAL PERFORMANCE Name/ I. D: Professor: Institution Affiliation: Course: Date: Word Count: Executive summary This report provides an analysis of the effects of rewards to organizational performance. It takes into consideration the different incentive schemes as employed by different organizations and how they influence organizational bottom line. This underscored; employee satisfaction, commitment to the organization, and employees trust to the management as key parameters to measure employee well-being. These three elements were considered as the perfect measure of happy or even delighted employees; this was linked to organizational performance in terms of productivity and attainment of set goals by the employees. Table of contents Title page…………………………………………………………………………. 1 Executive summary………………………………………………………………. 2 Table of contents…………………………………………………………………. 3 Introduction………………………………………………………………………. 4 Discussion/ analysis………………………………………………………………5 Conclusion and recommendation……………………………………………….

Research has shown that the rationale behind provision of fulfilling rewards to employees revolves around the fact that satisfied employees are able to transfer their satisfaction to the job. Employee satisfaction is evident in both financial and non-cash matters, this implies that employees are able to meet their obligations whenever they are satisfied. This improves employee retention levels against high turnover rates which is experienced in organizations where employee welfare is not well looked at. Reward systems should be aimed at ensuring employee contentment which in return results to high productivity and great customer service especially to service industries which involves high employee customer engagement. According to (Gibson, 1995), research shows that employees are primary consumers for organizations products and offerings. Studies have suggested that the level of pay directly influences how much production an organization can realize, and that different organizations have different reward systems based on their sizes.

What influences employees performance and satisfaction is the level of motivation emanating from the nature of the reward scheme in place. Whether employees motivation is as a result of; incentives, profit centred or even share ownership in the company, generally motivation levels are administered as either intrinsic or extrinsic. The two are the two types of reward system as discussed by many researchers, (Kerr, 1999). Intrinsic motivation refers to the inward reward to employees, it is promoted by highly intangible aspect of employee welfare such as appreciating workers for job well done. It refers to other factors other than inner drive that makes employees to like what they do in organizations. They include elements such as; competitive salary package, bonuses, health benefit allowances such as health insurance, incentives, promotions, offering contracts of services, and healthy work environment as well as job security.

Research shows that under extrinsic rewards, employees are looking at elements that will answer/ solve the following questions; are we able to pay our bills? Is our job secure? And whether their employers value their skills? The solution to these questions are solved by the context of job in which employees work in, which is facilitated by remuneration packages and the work environment the organization provides for its employees, (Scott, 2000). However, employees in any organization require that both rewards be embraced in order to wholesomely meet their (employees) divergent needs. Whether organizations like it or not, embracing one reward type and ignoring the other could leave several employee`s need unsolved hence compromising organization`s bottom line; productivity. Organizational performance refers to the real output realized weighed against the projected output or the desired outcome.

Organizational performance is measured on the following aspects; financial performance; rate of return on investments, shareholder return and against product market performance; the market share secured and sales volumes. Dissatisfied employees tend to show low commitment to their tasks, they doubtfully commit to their management. The level of employee commitment to their job is a reflection of motivation levels for the employees. On the other hand overly satisfied employees end up being valuable assets to organizations since they boost productivity. (Zingheim, 2000), employees at the intrinsic levels of motivation become brand ambassadors for their organizations and are able to make products and services endorsements and representing their organizations at the best levels which ultimately influence performance positively. Intrinsic rewards have proved to create or promote win-win situations between employers and employees since these rewards foster very high levels of self-worth and satisfaction as well as competency alongside competency.