Does Pay For Performances Diminish Intrinsic Interest?

The findings of two main studies was obtained from the Academy of Management Journal. The consists of two different cultural regions of the world. The studies were conducted in Hong Kong and China. The topics that were covered within this study was retaining and motivating employees and how the compensation preferences differed between regions. According to our course studies, rewarding for performance such as pay and other intrinsic or extrinsic rewards can have a positive impact on serval things within an organization. Some positive impact may include: attraction of employees, retention of employees, and job satisfaction of employees. This article describes findings from a study in which people have different motivations in the

We live in a society in which people are believed to be motivated by highly energizing and engaging rewards such as pay, job security, benefits and working conditions, all of which are extrinsic rewards. According to Daniel Pink’s book Drive – The Surprising Truth About What Motivates Us, he writes that these extrinsic rewards are in fact not the best ways in which to obtain and maintain motivation. Pink gives a new perspective on motivation in the workplace; it is argued that human motivation is largely intrinsic and that the aspects of this motivation can be divided into autonomy, mastery, and purpose. Based on the extrinsic reward motivation theory, low financial compensation can hinder motivation and performance in your profession,

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

Employees are motivated by both intrinsic and extrinsic rewards. In order for the reward system to be effective, it must encompass both sources of motivation. Studies have found that among employees surveyed, money was not the most important motivator, and in some instances managers have found money to have a de-motivating or negative effect on employees.  This research paper addresses the definition of rewards in the work environment context, the importance of rewarding employees for their job performance, motivators to employee performance such as extrinsic and intrinsic rewards, Herzberg’s two-factor theory in relation to rewarding employees, Hackman and Oldman model of job enrichment that

Pay and Rewards – pay and rewards attract, motivate and retain staff. The employment contract which lists rewards, whether it be pay, bonus or benefits, can remove animosity amongst employees and employers. However, recent research reveals that employees are no longer motivated by a financial reward alone, but

Total Rewards reflects what employees’ value from its employer. It focuses on five elements that attract, motivate, and retain the talent to achieve business goals. These elements are: Compensation, Benefits, Work- Life, Performance and Recognition and Development and Career Opportunities (WorldatWork, 2007, p. 4). This paper describes the five advantages of a total rewards approach, five ways a total rewards strategy can go astray, six steps involved in the design of a total rewards program and eight steps involved in the communication process of a total reward program (WorldatWork, 2007, p. 15-64). Finally, the paper

As the labor force becomes more highly developed and demanding, rivalry between organizations for talented employees is drastically increasing. It is extremely important that organizations make their company more enticing as an incomparable career opportunity. Instituting a total rewards system into an organization can do much to help it invite the paramount talent available and significantly condense turnover. The longevity of an organization’s employees is contributed to its total reward system. According to Heneman (2007), total rewards is defined as all of the tools, whether intrinsic or extrinsic, offered to the employer that may be employed to attract, motivate and retain employees. This could

Pay for performance systems have further been proven to have two advantages for organizations: attracting more high-quality employees and motivating employees to exert more effort at their jobs. (Gordon, Kaswin) This paper will show the positive benefits of performance pay as

In “Understanding Management”, there is a chapter on motivation that covers both extrinsic and intrinsic reward. The material does highlight the increasing trend of motivating people through appealing to those intrinsic needs and how it

“Year after year, as executive pay continues its inexorable climb, it's amusing to watch corporate directors try to justify the piles of shareholder money they throw at the hired help (Morgenson 1)”. There are many employees that go the extra mile and produce more for their company, but they often never receive anything extra in return. Due to this, they are less motivated to go the extra mile in the future. In contrast, incentive pay is beneficial to an organization’s overall production efficiency and effectiveness.

The system allows organizations to create results by rewarding the employees who are responsible of making them happen. By rewarding employees who are high performers and coaching low performers to improve their performance can help improve the overall productivity of the company; However, the improvement will not last long. Not every employee finds a long-term motivation by a pay increase. Some employees are motivated by being recognized by their peers, others by having the same beliefs as the company, or by simply feeling like they are making a positive difference among their community. According to Kohn (1993), “Just because too little money can irritate and demotivate does not mean that more and more money will bring about increased satisfaction, much less increased motivation” (para 15), which is why it is important to seek different strategies to motivate employees. A way companies could sustain its’ culture by having employees who have similar core values. Creating a culture where employees look forward to spending the day at their job and making a difference, instead of feeling like their job is an obligation is a goal. Placing values on employees decreases turn-over and increases employee’s satisfaction with the job. Another way that

Human Resource Management (HRM) is described as a “distinctive approach to employment management” (University of Leicester, 2006:5), which mainly focuses on employees as the key driving force to achieve organisational success. This qualitative approach differs from traditional personnel management systems that aim to integrate HRM into strategic management beyond HRM’s routine functional role. This integration supports sought after organisational objectives to include quality, commitment, and flexibility. This paper examines the key HRM function of reward management, in particular, performance related-pay systems, presenting their main concepts, roles, weaknesses and strengths in comparison to the old traditional pay system.

Although research generally confirms that pay-for-performance plans can influence greater outcomes, it is unclear how effective different pay plans are relative to each other (Park, 2012). Like most things in business, compensation is something that requires evaluation, study, assessment, strategy, modeling and integration.  Achieving a pay for performance culture does not happen without paying attention to the behaviors, activities, rewards and motivations that have to be linked and reinforced through a well engineered and successfully executed process.  Actually if that process does not tie rewards to shareholder financial objectives, employ the proper mix of compensation elements, result in meaningful dollars, embrace performance that employees can impact and are effectively communicated and reinforced, then the results it produces will likely fall short (Vision Link Advisory Group, 2013).

Pay for performance is to link employees’ salary or salary increase to his or her performance. It seems to be a reasonable or attractive idea but it often does not work well in organizations. Please use at least 4 motivation theories or models to explain why pay for performance may not work as expected—particularly in government and nonprofit organizations.

Being rewarded and recognised for their work or contribution is what keeps an employee motivated to work towards achieving the organisational as well as personal goals. When the employees is motivated by rewards, they will have job satisfaction consequently increasing the productivity of the organisation. It necessitates the need of managers to pay more attention in understanding their employees and come up with suitable types of reward systems for the organisation so that the employees are intrinsically and extrinsically motivated all the time. The hypotheses that I put forward here is to support this statement that effective reward management is critical to