How Can Managers Encourage Effective Performance by Managing the Reward Process in Their Organisations?

10.1.4 HOW CAN MANAGERS ENCOURAGE EFFECTIVE PERFORMANCE BY MANAGING THE REWARD PROCESS IN THEIR ORGANISATIONS?

Reward system has been used as method of retaining employees, reduce turnover, enhance employee motivation and also help an organisation to be more competitive in the market place. However the reward system has also impeded creativity, demotivated staff and reduced the productivity of the company. Therefore managing the reward process has become an important role in an organisation. Managers therefore can manage by using different methods such as making sure the rewards are relevant and valued. Motivations being the drive force behind performance, managers are using different theories to achieve this. In this topic, I will use Maslow hierarchy of needs and Expectancy theory to demonstrate the action that Managers have taken.

To encourage effective performance by managing the rewarding process, managers must link rewards to performance. A manager can apply performance appraisals to be able to rate the performance. Rewarding would therefore need to be an on-going activity. Managers would need to understand the needs of their staff to be able to reward effectively. The managers need to apply rewards soon after the performance occurs. For instance if an employee has done a great project, the managers would need to give recognition immediately. To avoid entitlement from the employee’s side, Skinner’s theory talks about the variable ratio schedule. The Manager may therefore need to apply rewards after a variable number of times especially to sales staff.

Managers have to understand the needs of the staff to apply relevant reward. Pay-check may not be the best reward to a Senior Manager but can be a good motivator to a tea lady. There are different types of rewards such as praise, challenging work, educational growth, paid leave, merit increase, promotions. I think it is important to know the age groups of your staff, individual goals, and individual achievements and to know their self-efficacy. In this way the Manager will be able to effectively reward the relevant item at that particular time. The Manager must check the value of the reward to specific employee. He may do that by asking the employee directly. To increase the value, the rewards have to be tailor-made and not randomly selected. For instance an employee who has been finishing late because of a project, may need to be rewarded by a day rest. The reward can either be intrinsic or extrinsic