Question

Discuss the concept of relating rewards to performance. Should companies base rewards to performance only? What might be the consequences – good and bad if all rewards were tied to performance? Should group performance also be part of the rewards received? What might be the pros and cons of group rewards?

Answer 1

When rewards are related with performance, they help an organization to develop sense of ownership among employees and facilities long term focus to employees with continuous improvement in their performance. It also reduces the service operating cost. Generally companies relate rewards with performance because it helps employees to get motivated towards work and being efficient and effective while doing work.

Yes rewards should be the base of performance only because it increases the productivity and capacity of employees to work.

Consequences (good) of if all rewards were tied to performance-

1. Install a sense of ownership among employees

2. Facilitates long term focus

3. Continuous improvement in performance

4. Reduces service operating costs

5. Promotes team work

6. Increase employee satisfaction

Consequences (bad) if all rewards were ties to performance-

1. Dissatisfaction among employees who not receive rewards

2. Feeling of jealously increases among employees

3. Internal competition level increases within the team members

4. Employees who received rewards became over confident and disrespect others who did not get.

Yes group performance is also the part of reward received. To motivate team who achieve better results together reward is given by companies. Rewarding employees based on individual performance is the best way of rewarding group.

Pros of group rewards-

1. Motivate employees to work together as a team

2. It provides a benefit for a reaching common goal

3. It helps everyone to work towards company’s objective.

Cons of group rewards-

1. Due to group, individual performance is not improved

2. Individual does not see their effort leading to the award

3. Competition among group increases