Employee rewards

Employee Rewards

Introduction

The previous section dealt with motivation theory and practice. There is no doubt that motivation is the crux for good performance, but there is no clear cut answer to the question of how to motivate. The previous pages gave a glimpse of the answer through various theories and practices.

Money is a factor in motivating people and this section concentrates on this.

Employee reward systems are discussed in general and later in specifics in terms of payment by results. Various schemes for financial motivation are also described.

Money is important!

This is, perhaps, saying the obvious. But it still needs to be said, for a perusal of the previous section may give the impression to the contrary, at least judging from Maslow's concept. Refreshing as it is, if the theory was completely valid then, at least in affluent countries, economic incentives should have lost all their force. This we know is not correct.

According to Peter Drucker (1974) 'there is not one shred of evidence for the alleged turning away from material rewards... Antimaterialism is a myth, no matter how much it is extolled.' In fact, they are taken so much for granted that their denial may act as a de-motivator. 'Economic incentives are becoming rights rather than rewards.'

There is no doubt that we live in a money-motivated world. Any amount of human relations cannot compensate for a lack of monetary reward. If the reward is right, good human relations will give that extra zest to a team, motivating them to give of their best efforts. Insufficient monetary reward cannot be compensated by good human relations.

Even dedicated footballers do not think of the honour of playing for England, they merely pay 'lip service' to it; the financial rewards of playing for their clubs far exceed those recieved from playing from their country. Cricketers and rugby players no longer play for their own country but opt for the 'highest bidder'. Professional tennis players have refused to play at Wimbledon, the 'Mecca' of lawn tennis, because the rewards were not attractive.

It is no different in the industrial world. Strikes for better salary and rewards do still occur. All this despite the claim of psychologists that security is the prime need of a person, as indicated in the previous section. Has the sense of values changed with time? But we are not concerned here with the philosophical angle, but with hard facts of life in a commercial world.

Self-motivation can go only so far and it needs to be constantly reinforced by rewards. In particular, merit must be measured and rewarded regularly, if it is to be encouraged and sustained. The 'gold banana' in Foxboro has its origin in just an ordinary banana which one of the pioneers could muster on the spur of the moment when he discovered extraordinary performance by one of the employees (see next section.)

Next | Rewarding executives