Effective Reward Systems

A motivated workforce can be a significant factor in organizational success. When employees are motivated to work at higher levels of productivity, the organization as a whole runs more efficiently and is more effective at reaching its goals. This is in contrast to an unmotivated workforce, who can negatively disrupt an organization and distract employees from their work. For this reason, it is imperative that managers understand the power of reward systems and how they are used to influence employee behavior.

Rewards are positive outcomes that are earned as a result of an employee’s performance. These rewards are aligned with organizational goals. When an employee helps an organization in the achievement of one of its goals, a reward often follows. There are two general types of rewards that motivate people: intrinsic and extrinsic.

Intrinsic Rewards
Intrinsic motivation is internal to the person in that it is something that you have to offer yourself and is driven by personal interest or enjoyment in the work itself. Because intrinsic motivation exists within the individual, achieving it does not depend on others. Some people believe that the most powerful rewards come from inside a person.

Think of that sense of accomplishment you feel once you have overcome a significant challenge or completed an assignment or work project that required a good deal of effort. Intrinsic motivation provides that personal pat on the back or natural high that reflects a person’s ability, competency, growth, knowledge and self-control over their endeavors. Employees who are intrinsically motivated tend to work at higher levels of productivity and strive to develop professionally. Intrinsic rewards include things such as: personal achievement, professional growth, sense of pleasure and accomplishment.

Extrinsic Rewards
Extrinsic motivation is based on tangible rewards. Unlike intrinsic motivation that is self-administered, extrinsic motivation is external to the individual and is typically offered by a supervisor or manager who holds all the power in relation to when extrinsic rewards are offered and in what amount. Extrinsic rewards are usually financial in nature, such as a raise in salary, a bonus for reaching some quota or paid time off. However, extrinsic rewards can also be as simple as getting the better office, verbal praise, public recognition or awards, promotions and additional responsibility.

These material rewards can be motivating to employees because pay, time off, advancement and recognition are important to most workers. Just imagine how de-motivating it would be to underpaid, overworked and unappreciated, and you can quickly see how important extrinsic rewards are to organizational success. An extrinsically motivated person will work on a task that they do not particularly care for simply because of the anticipated satisfaction that will come from some extrinsic reward.

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