post responce

1st post (1)Understanding the Link Between Reward Systems and Organizational Goals
Performance management and reward systems are powerful tools for driving employee
performance. However, their effectiveness is maximized when they’re strategically aligned with an
organization’s goals and values. To achieve this:
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Clearly Define Goals: Organizations must first have well-defined goals at all levels (companywide,departmental, individual).
Link Rewards to Goal Achievement: Design reward structures directly incentivizing behaviors and
outcomes that contribute to those goals. This communicates what the organization values.
Communicate the Connection: Employees need to clearly understand how their efforts impact
organizational success and how this success translates into rewards.
Types of Reward Systems
Let’s break down the two main categories, considering their motivational impact:
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Financial Rewards:
Base Pay: Competitive salaries and wages establish a foundation of fairness.
Merit Increases: Performance-based salary adjustments encourage consistent performance.
Bonuses: Lump-sum payments tied to goal attainment or profit-sharing motivate exceeding
expectations.
• Stock Options: Potential for future financial gain aligns employee interest with company success.
2. Non-Financial Rewards:
• Recognition & Praise: Public or private acknowledgment validates contributions.
• Skill Development: Opportunities for learning and growth signal investment in employees.
• Flexible Work Arrangements: Autonomy and work-life balance contribute to satisfaction.
• Desirable Job Assignments: Challenging projects offer a sense of accomplishment.
The Importance of Non-Financial Rewards
While money is important, research (including the Harvard Business Review article) highlights that
collaboration and overall performance can suffer in environments focused purely on financial
incentives. Non-financial rewards play a crucial role in boosting morale, fostering loyalty, and building
a positive work culture.
Fairness and Transparency are Key
Employees need to trust that the reward system is fair and objective. This means:
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Clear Performance Criteria: What behaviors and outcomes are rewarded should be transparent and
consistently applied.
Open Communication: Regular feedback and discussions about rewards keep employees informed
and prevent misunderstandings.
Equitable Distribution: Bias or perceived favoritism will destroy motivation. Reward allocations
should be justifiable.
Adaptability and Continuous Improvement
Evolving with Organizational Needs: Reward structures shouldn’t be static. They must align with
changing organizational goals and priorities.
Collecting Feedback: Seek employee input on what they find motivating and how the reward system
can be improved.
References
Aguinis, H. (2019). Performance Management (4th ed.). Pearson.
Gardner, H., & Matviak, Ivan. (2022, August 16). Performance management shouldn’t kill
collaboration. Harvard Business Review.
Mosca, L. (2021, June 7). 6 reasons why pay-for-performance is a game changer. Forbes.
Respond of 1st post :
2nd post ( 2 )
Performance Management and Reward Systems
Reward systems are important in enhancing the motivation of employees. The design of the
systems is important for the organization as this follows a systematic process in the appraisal system,
ensuring that the employee gains the right feedback from the system. The reward system can be
monetary or non-monetary, depending on the organization and the goals it aims to achieve from the
employees. The consideration of the systems leads to increased satisfaction and motivation of the
employees, leading to increased performance in the long run. The consideration of the objectives of
the rewards system is important as this helps support the employees in their goals and ensures that
they align with those of the organization.
Rewards Systems
Reward systems are important in the organization and are classified as extrinsic and
intrinsic. With the extrinsic rewards, the focus is financial payments and the conditions at work that
help the employees perform in their roles. With this, the employees’ roles are considered (Aguinis,
2023). The objectives of the rewards are important as they help support the organization’s roles, and
this is done through the alignment of the organization’s goals with the employees’ roles. The
performance management process applied is also critical as it helps in the recruitment and retention
of employees, and it ensures that the right skills of the employees are considered. The system also
ensures the employees’ motivation and the assessment of the rules and regulations that the
organization should consider in the management of the employees’ roles.
Different Types of Reward Systems
The reward systems that are used by the organizations are critical as they allow for the
motivation of the employees. One of the reward systems is the use of base pay, which is the minimum
wage that the employees receive for the hours they have worked. Pay is related to performance, and
this relates to the payment based on the output of the employees (Awan et al., 2020). With this
scheme, the employees work harder to increase their wages. Individual performance scheme relates
to the bonuses that the employees receive, and this is based on employees meeting their objectives
and the organization making a profit. In this case, the goals of the organization and that of the
individuals are aligned. The use of commissions is also a critical form of reward, mainly applied to the
sales staff. The commissions are meant to enhance the motivation of the employees, and their
salaries are variable. Where the sales are higher, the commissions for the staff are higher. Non-cash
rewards are also critical in enhancing employee motivation, and they include stock options that allow
employees to buy company shares (Manzoor, Wei & Asif, 2021). The employees also receive benefits
in kind, including health insurance. This is important for the employees as they feel valued in the
organization.
Importance of Alignment of Rewards System with Organizational Goals
The alignment of the rewards systems with the goals of the organization is important as it
helps focus on the motivation of the employees. The decisions made by management regarding
rewards are meant to increase the company’s health. The rewards system goals must comply with
the country’s laws, ensuring that the company averts legal issues (Manzoor, Wei & Asif, 2021). The
consideration of the strategic levels of the organization allows for the alignment of the reward system
to that of the organization.
With the performance and rewards system, the focus is to ensure the employees’ increased
motivation, as this allows for improved organizational growth. It helps in enhancing the satisfaction of
the employees and encourages their performance. Organizations consider their growth, focus on their
goals, and align this with individual employee growth. With this, there is assurance that all employees
are aware of their roles and how their performance impacts their growth and rewards.
References
Aguinis, H. (2023). Performance management. SAGE Publications.
Awan, S. H., Habib, N., Shoaib Akhtar, C., & Naveed, S. (2020). Effectiveness of performance
management system for employee performance through engagement. SAGE
open, 10(4),
2158244020969383. https://doi.org/10.1177/2158244020969383
Manzoor, F., Wei, L., & Asif, M. (2021). Intrinsic rewards and employee’s performance with the
mediating mechanism of employee’s motivation. Frontiers in psychology, 12, 563070. https:// doi:
10.3389/fpsyg.2021.563070
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