Human motivation is a complex process and so is the worry of managers in getting their people motivated to work. As one of the tools and instruments for enhancing and sustaining motivation in employees, organizations have been using rewards, incentives and prizes of different forms and structures. Here in this paper I like to put forth a short discussion on the basic concept of rewards, incentives, their role in promoting work motivation and the ways they can become effective or ineffective before finally presenting some conclusive notes on the matters to be particularly taken care of in managing and administering rewards.
Background
As human beings are rational, it is not unnatural that they seek some form of return, benefit, or favor in their endeavors. A benefit or favor appeals and a harm or any feeling of loss- material, emotional or else – distracts. So in creating an inspiration and willingness to deploy hard efforts to some work can be induced by means of imparting a feeling of benefit, reward, or favor. In the realm of compensation administration in Human Resource Management the terms salary, wages, benefits, rewards, incentives refer to the compensations of different character, design and purpose. While salary and wages form the most fundamental compensation structure for employees, rewards and incentives are something different. The concerns raised in this paper are related to the aspects of rewards and incentives.
Rewards and Incentives
Rewards refer to the form of compensation to some work accomplished, goals achieved or significant efforts rendered by the employee. Incentives differ in that these are announced beforehand so that the lure or attraction of the additional benefit above and beyond the normal wage structure can make one work with better focus and dedication to the specific achievement. These are associated to some particular segment or activity of business the organization likes to focus for a short term. The segment entitled to the incentive structure can change time to time according to the situation and priority to be accorded. For instance, a company can announce that if a salesperson sells more than 500 items of a new product in a week, he/she shall get 1% sales commission for every additional unit sold beyond that number. This is an incentive plan. This can help mobilize the salespersons better to sell the newly launched product in the market. Such a plan can be for a short time till the product gets well familiarized and penetrates into the market. After some days or months, the plan can be dropped or changed linking to some other product or activity. A bank can announce its incentive scheme today to the number of new accounts opening, number of ATM Card sale, or number of subscriptions to internet banking service as the need be. In some days in the future, the scheme may be linked to the update of KYC documentations, recovery of bad accounts, or number of pending items reconciled. The bank can beforehand announce some incentive scheme with scoring and evaluation linked to the designated outcomes. Alternatively, rewards can be offered to the best achiever or performer based on the meritorious accomplishments on some designated performance parameters.
Rewards and Motivation
Before discussing the relation of rewards and motivation it is better to first realize the dissimilar nature of the intrinsic and extrinsic motivation. It is fundamentally the extrinsic motivation that is driven by rewards and incentives. Rewards and incentives are meant to control and shape the behavior of people by interfering the individual’s sense of preference and fondness. One would behave a different way owing to the gratification by rewards. One would compellingly move to perform some undesirable type of job just because of big or valuable rewards going contrary to the independent likes, choices and preferences. He/she would devote more or less energy to some particular aspect of work achievement based on how the rewards have been designed. Intrinsic motivation in contrast, arises from inherent preferences to recognition, autonomy and power as the psychological base rather than attraction of rewards.
Rewards are commonly assumed to create and stimulate motivation in people. But as Hidi (2015) observes they also undermine intrinsic motivation negatively affecting the conceptual learning, creativity, and self-regulation. From this perspective, it can be construed that rewards in the form of money can be detrimental to the mindful, educated, good cultured and recognition-seeking people. In this regard, Hidi (2015) observes that the extrinsic motivation is differentiated by the extent to which the value of extrinsically motivated behavior is endorsed by the individual. While intrinsic motivation is about performing the tasks for own satisfaction and will, extrinsic motivational measures are perceived as something imposing control, pressurization to act (or not act) in certain ways. Uninteresting and monotonous type of work and activities that generally fail to intrinsically appeal or motivate the people are got done through extrinsic motivational measures. So, designing and allocating tasks in a way to make them interesting, significant and presumably important can be to great extent, a wiser alternative to big and colorful reward schemes.
Pitfalls in the Use of Extrinsic Rewards
Though commonly used, rewards are not simple and easy tools of managing human behavior and motivation. While properly designed rewards can boost employee motivation and productivity, the same can derail and mislead the people’s spirit and efforts in devastatingly wrong direction. Steel & MacDonnel (2012) enumerate five specific ways in which rewards come to fail:
a. Being paid for what we love can make us love it less.: If one is intrinsically motivated or feeling rewarded with the work itself, any addition of extrinsic rewards, tends to undermine his/her attraction to the work causing demotivation. For example, if a person wants to volunteer in a school or hospital in a remote village out of his own will or altruism to serve and feel happy, any idea of paying him for the work can cause to disinterest him.
b. How can be as important as what: This means, rewards criteria should be well communicated, understood and perceived as fair and just. Similarly, the criteria of should be consistent. Unpredictable changes in the rewards criteria can impart a feeling of deception rather than motivation.
c. Reward tells us how rewarding the task really is: When rewards are attached to tasks, the perceived value of a task is altered. Bigger and difficult rewards make tasks appear more important and valuable. Thus, there can arise a false categorization of tasks as more or less important based on the size of rewards attached to them rather than the real significance of them.
d. Focusing on winning instead of how to win: Rewards not properly designed tend to create a desperate race to win, attain or show winning rather than encouraging people to work in better ways to achieve. This kind of misdirection of efforts and attentions can result with the disproportionate focus on extrinsic rewards.
e. Wanting rewards, we don’t like and liking rewards we don’t want: Extrinsic rewards can be attractive in terms of the amount as well as the feeling of accomplishment among the colleagues and coworkers. But what can happen is that jobs are distasteful when rewards are attractive. Similarly, jobs are alright but rewards are not appealing or valuable. This mismatch can make rewards system ineffective in raising motivation.
Conclusion
Though human motivation is never straightforward and simple, rewards are one of the tools for the purpose. Extrinsic rewards undoubtedly have costs and it is customary that management expects returns to follow in the form of enhanced motivation and productivity. However especially in case of knowledge organizations rather than labor intensive ventures, the use of extrinsic rewards and excessive emphasis on them might not be appropriate. It is wiser to recognize that extrinsic rewards cannot simply translate into better employee motivation and productivity. It is the intrinsic rewards by virtue of the work itself, the joy and contentment of the work itself that comes first before the manifest effectiveness of the extrinsic rewards. So, it follows that a prudent management has to find and use a right mix of intrinsic as well as extrinsic rewards appropriately at the different levels of the organization instead of expecting any straight relation of rewards and employee performance.
References
Steel, P., MacDonnel, R. (2012). When rewards go wrong. A tale of five motivational misdirects. Performance Improvement 51(8), 19.25.
Hidi, S. (2015). Revisiting the Role of Rewards in Motivation and Learning: Implications of Neuroscientific Research. Educational Psychology Review, 28, 61 – 93.