BUS101 | Business | Impact Of Rewards On Organisational Performance

Introduction

The practice of reward system or appreciation vary from one organisation to another. In order to motivate and increase employee engagement, organisations implement reward system. However, the type of reward system that is practised within the organisation determines the level of impact it has on employees’ performance. In order to get the best from their employees organisations execute the practice of reward system. It has been observed from many researches that the practice of reward system in organisations have been proved to be motivating the employees to a significant level and as a result of which have a positive impact in their performance (Anitha, 2014).

The following report discusses the link between reward system and organisation performance. There are many factors that triggers the organisational performance however, in this particular paper, the impact of reward system on organisational performance have been established. Organisational performance is majorly determined by the employees or staff members and their level of production and quality of work. It is a universally known fact that motivated employees are the reason behind the success of any organisation (Young et al., 2015). There have been many researches that states that reward system are a great practice in order to motivate the employees. In order to further justify the fact that reward system have an impact upon organisation performance, the following report is prepared.

Rationale of the research

Reward system and its practice in organisations have been a widely popularised system. However, the type of reward system practised are distinctive from one organisation to another. There have been many research conducted upon these two factors – reward system and organisational performance however, no concrete link have been established between the two factors. In this particular study the relationship between reward system and its impact on organisational performance as a whole shall be established with the help of an in-depth research methodology.

One of the major issue that the organisations have to deal with is to keep the employees of the organisation motivated (Al Ariss, Cascio & Paauwe, 2014). Employees are considered to be the key asset of any organisation since their performance contributes towards the success of it (Dries, 2013). Organisations around the world adopt various strategies for the purpose of keeping the employees motivated. One of them being the reward system however, the kind of reward system that is practised in organisations vary from one another. Henceforth, in order to find out the level of impact that reward system have on organisations performance and its link with it is the sole purpose of this study.

Research Methodology

Research philosophy

Research philosophy is applied to determine the detailed analysis of the research study. There are majorly three research philosophy and they are interpretivism, positivism and realism. For this particular research study a positivism research philosophy is adopted. The positivism research philosophy helps in developing the in-depth analysis of a particular and hence, this research philosophy is best suited for this particular study (Vaioleti, 2016).

Research design

There are mainly three types of research design that includes descriptive or analytical, exploratory and explanatory. The analytical research design helps in determining and evaluating the research study in a descriptive way along with referring the prior researches and theories related to the topic (Flick, 2015). Henceforth, for this research paper an analytical research design shall be adopted. The prior researches conducted upon the topics of reward system and organisation performance shall be referred in order to develop and understand the relationship between the two.

Data collection method

There are significantly two types of data collection method and they are primary and secondary data collection method. For this research study, primary data collection method shall be adopted and for this purposes various methodology such as interviews, surveys shall be conducted. This method shall give the most appropriate data that shall be later interpreted for the results.

Sampling method and sampling size

For accomplishing this research study a simple random sampling technique shall be adopted. A total number of 4 employees of an organisation was asked to participate for the research study out of which every candidate participated. In addition to this, a total number of two managers was asked to participate and contribute their perception towards the topic of this research.

Data analysis technique

In order to carry out the analysis of the qualitative data collected with the help of interview based questions, the collected data was interpreted. This conversion helped to evaluate the level of impact reward system have over organisation performance and also to establish the link between the two factors.

Results

Findings and Discussion

Research findings and evaluation are crucial part of the research report. In this context, Jiang, Gollan & Brooks (2017) focused on the essentiality of the research findings and major part they play in representing primary data collected during the procedure of research. In this section, the report aims to outline the findings from the qualitative primary research that has been performed. The research report has also aimed to validate the primary collected data by explaining the links in between the data. In this context, the findings will be interpreted in accordance to the theories of rewards system specific to the terms of the interviewee in order to show the way it reflects on their performance and operational nature of work.

Profile of interviewee

Four semi structured interviews has been carried out with the senior managers from various functions within the international supply chain department of the organisation. However, the conducted interviews continued for an average time of 40 minutes that were audio recorded for the purpose of future use. In this context, all of the interviewee managers had some experience of management and had delegated teams that reports to them.  Specifically, the cross cultural and managerial component of the roles were considered in terms of rewards as well as performance. All the interviewees are referred to as mid-level and senior level managers with the organisation that includes a mixture of different genders. Therefore, all the managers will be considered as the fair representation of operational areas with an international department of supply chain.

Findings

The findings from the primary data has been done in the form of interviewee replies that has been classified under different sub headings. The findings show that impact of different types of rewards on the performance of the organisation along with the evaluation of the cross-cultural factors in terms of rewards in various locations.

Employee performance and rewards system

In this, the interview focused on various effects of rewards in general that the employee have. For the first question that has been asked, the first participant found the rewards to be a unique motivating element in terms of enhancing performance as did the third participant of the interview. Both of the participant agreed on the system of rewards and the type of rewards the organisations offer. The third participant believed that increased amount of motivation depends on the happenings at the pint of time with the employee that it also depends on the individual employee. In contrast to this, the second and fourth participant did not rely and prefer the system of rewards that are the primary motivating system. According to them, job satisfaction is more necessary. In this context, the third participants believed that the capability of self-reliable and sense of accomplishment is more important for motivating performance (Chahal, Jyoti & Rani, 2016).

However, the entire participant of the interview believed that performance increased with the increase in the number of rewards, while the first participant believed that it was not always necessary. The participant thought that system of rewards is dependent on the individual and rewards they prefer. On the contrary, the first, second and third belied that the system of rewards is required to structured well for making it work in an effective way such as linking it with the bonus incentives (Baškarada, Watson & Cromarty, 2016). However, the third participants contradicted the view as the participant found it relatively less effectives while second participant found that increased system of rewards helped to enhance the performance of the organisation within a short period. Some of them found that the system of rewards have a restricted shelf of life and the employees will come back to normal pace of working in their long run period.

  When the participants were asked if the system of rewards increased the motivation of the employees. The first participant agreed that they perform best when the system of rewards is known prior to the beginning of the working process. The fourth participant did not seem to believe on the monetary system of rewards as he thought that it could motivate an employee more with stressed job satisfaction. The trend continued with the second participant as well who found that employees were more motivated by the support from each other, where they get a opportunity and capability to learn from their managers rather than rewards. According to them, rewards are just short period of motivating elements (Samad, 2015). On the contrary, to this, the third participant believed that the system of rewards could result in the motivation of the employees, but that is a personal viewpoint that cannot fit for all while motivating people. They claimed that it is necessary to understand the requirement of the individual employees while rewarding them and make the system effective for the employees. In this regards, they found that targeting while rewarding people are value most in enhancing the performance.

When they were asked if the system of rewarding employees who do not belong from the same level and are performing the same tasks in different way could be differentiation. In this all, the participant found this to be a major issue a very differentiation. In this aspect, the first participant found that this could have a negative impact on the performance, once the employees become aware of it. The third participants found it to be extremely demotivating and through that company is not treating the employees in a fair way and it lacks procedural justices. Similar to this the fourth participant of the interview had similar view pint and shared examples of interest that free loan system and exceptions parental leave for certain people is a major issue of division (Kuvaas et al., 2016). The second participant also found it to be extremely divisive that is specifically prevalent in organisation in UK and Australia. They believed that this type of rewards system are more found for the senior level managers and the employees who have international experience. According to them, this system is short sighted and juvenile to expect as many of the same rewards for the person in some altered jurisdictions get. This is due to the fact; the cultural system of rewards system may negatively affect the performance.

Conclusion

Henceforth, from the above study it can be enumerated that organisational performance is significantly influenced from the performance of the staff member of the organisation. The highly motivated employees are more likely to perform better and as a result have positive organisation performance. Henceforth, motivation among staff members influences them to perform better. From the above research conducted and the results obtained from it, it can summarised that reward system is one of the most appropriate technique that increases the motivation of the employees and ultimately contributes in better employee performance. The impact of reward system upon organisation performance is vast and dynamic in nature.

References

Al Ariss, A., Cascio, W. F., & Paauwe, J. (2014). Talent management: Current theories and future research directions. Journal of World Business, 49(2), 173-179.

Anitha, J. (2014). Determinants of employee engagement and their impact on employee performance. International journal of productivity and performance management, 63(3), 308.

Dries, N. (2013). The psychology of talent management: A review and research agenda. Human Resource Management Review, 23(4), 272-285.

Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research project.Sage. 263-268.

Vaioleti, T.M. (2016). Talanoa research methodology: A developing position on Pacific research. Waikato Journal of Education, 12(1), 228-230.

Young, W., Davis, M., McNeill, I. M., Malhotra, B., Russell, S., Unsworth, K., & Clegg, C. W. (2015). Changing behaviour: successful environmental programmes in the workplace. Business Strategy and the Environment, 24(8), 689-703.

Jiang, Z., Gollan, P. J., & Brooks, G. (2017). Relationships between organizational justice, organizational trust and organizational commitment: a cross-cultural study of China, South Korea and Australia. The International Journal of Human Resource Management, 28(7), 973-1004.

Chahal, H., Jyoti, J., & Rani, A. (2016). The effect of perceived high-performance human resource practices on business performance: Role of organizational learning. Global Business Review, 17(3_suppl), 107S-132S.

Baškarada, S., Watson, J., & Cromarty, J. (2016). Leadership and organizational ambidexterity. Journal of Management Development, 35(6), 778-788.

Samad, A. (2015). Towards an understanding of the effect of leadership on employee wellbeing and organizational outcomes in Australian universities. The Journal of Developing Areas, 49(6), 441-448.

Kuvaas, B., Buch, R., Gagné, M., Dysvik, A., & Forest, J. (2016). Do you get what you pay for? Sales incentives and implications for motivation and changes in turnover intention and work effort. Motivation and Emotion, 40(5), 667-680.