The paper “ Financial Incentives in the Workplace - Importance of Reward Systems, Types of Financial Incentives” is a breathtaking example of a literature review on human resources. To improve overall organizational performance, the performance of individual employees has to be addressed first. Managers and organizations have continuously searched for the best ways to increase and maintain high performance from their employees. Management experts have on the other hand developed theories to direct managers on ways to achieve high performance. The art and science of encouraging better performance, henceforth called motivation has borrowed widely from a number of social psychology theories.
These theories are broadly categorized into two; those that support financial rewards as ways to enhance performance and those that oppose pay packet and other forms of financial rewards. There have been claims that “ an employee is only motivated by the money in the pay packet. Other benefits are just additional costs to the business. Get the pay right and everything else will follow. ” This paper seeks to oppose this view by indicating that other rewards other than financial rewards are important in rewarding employees and enhancing individual performance.
The paper will draw support from a number of sources on employee motivation and rewards and also highlight some empirical observations on the subject from existing organizations. Importance of reward systemsRewarding employee is a form of recognition of their efforts in the workplace and it encourages productivity. Organizations often develop frameworks for rewarding their employees where most of them are based on roles and responsibilities of respective roles and others such as sales are based on countable improvement in work output. The work of Armstrong (2002) underscores the importance of employee reward systems.
In part, he says that employees are the major variable in an organization’ s success hence their recognition and appreciation through rewards is paramount. He says that rewards encourage employees to give in more at work beyond their jurisdiction or beyond their roles and duties in an acceptable manner.
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