The Implications of the Reward System on the Performance in Relation to Self-Efficacy

Self-efficacy is the belief in one’s ability to organize and execute the actions necessary to manage a situation ("What Is Self-Efficacy?", n.d.). Self-efficacy allows divergent thinking because cognitive limits are not set in place.

Self-efficacy can be described as the level self-confidence that a person has when they try to do something. It is important in making a behavioral change because people need to envision themselves succeeding.

Efficacy is the behavior or being effective, efficacious and in control. The self can be defined as ones identity. This means that self-efficacy can be defined as the ability to effectively control their own outcomes by changing their actions. It is the self-regulation of behavior by intelligent, affective and motivational processes. Self-efficacy is made up by self-concept, control, and cognitive processes. Ones self-concept is their thoughts and feelings about who and what they are; it is influenced by social interactions and experiences. It has to do with an innate set of morals, values and attitudes that is developed through ones interaction with their environment. Self-regulation allows one to behave in a way to maintain a positive self-concept in a dynamic and interactive world. Self-image, self-esteem and self-concept all interact to influence a persons

A Performance-Based Pay system is an increasingly popular compensation method used by organizations to increase productivity. A goal for all companies is to try and remain competitive and control costs, this is a reason for performance-based pay systems becoming more popular. This type of system attempts to link compensation to performance. (Gena Richter, 2002) These systems are directly tied to organization or individual performance and are most effective when based on objective measures of quantity or quality of performance. If we wish to have a direct impact on work motivation, it must be linked directly to the performance of desired behaviors. In order for to put this type of system into place, performance evaluations must be conducted regularly , as well as training and development for those with performance that isn't quite up to par. These additional resources will be necessary for our organization if we implement a performance based pay system. (William B. Bernathy, Ph. D., 2004)

Pay and reward systems exist in the form of pay, bonuses and benefits, financial and non-financial and designed to improve performance, increase motivation, staff retention and increase profitability. Appreciation and gratitude is widely received as reward and the opportunity for training and development for career progression.

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

The key components to developing effective Reward Strategy is to ensure that there are clearly defined goals to meet business objectives, that the reward programme meets the needs of both the organisation and its employees, and to ensure that this is then supported by effective HR policies. In order to ensure these criteria are met there are a number of factors which influence how reward strategy is developed which include both internal factors within the organisation itself, as well as external factors outside the organisation.

A motivated workforce can be a significant success when employees are motivated to work at a higher levels of productivity. Also this means the whole organization is more effective at reaching it’s goals. Rewards can be a positive outcome when it comes to boosting your organizations self-confidence and higher employee satisfaction. Having a reward system can always be a good outcomes because this shows how much your workers are willing to work to achieving a goal in order to receive something in return. This not only gets things done but brings out another side of your organizations as a whole.

It’s essential that managers understand their employees’ perceptions of the importance and fairness of the reward system and then clearly communicate what needs to be done

This article examined the necessity of changes required to traditional reward systems in order for employees to remain motivated and productive in the workplace (Lawler & Worley, 2006).The changes that must occur are in response to shifting environmental demands, with reward systems and motivational tactics holding exceptional importance to the ongoing success and longevity to the organization. The article then emphasizes the ineffectiveness of traditional reward systems, such as merit pay. This is largely attributed to how merit pay salary increases are small and become a permanent part of an individual’s pay (Lawler & Worley, 2006). As a result, the relationship between pay and performance is weak and not particularly motivating. As a more effective alternative, companies should look to implement reward systems such as bonuses in the form of short-cycle business periods, as they have shown to be effective motivators as well as flexible enough to compensate for organizational changes. Lawler & Worley (2006) concluded that “traditional reward systems lead to lack lustre performance, and that in order to create a high performance organization, companies must employ different reward systems that motivate performance, reward change, and encourage the development of individual and organizational capabilities” (p.5).

Research has indicated different potential sources of social support, including upper management, supervisors, peers, and subordinates (Goldstein, 1986; Baldwin & Ford, 1988; Noe 1986; Noe & Schmitt, 1986). Some evidence is found for the notion that supervisory support influences self-efficacy. When there is a personal and professional relationship between an employee and manager, self-efficacy is affected in a way that they can guide clear messages about the value and importance of training (Tracey, Hinkin, Tannenbaum, and Mathieu, 2001). In other words, self-efficacy can be enlarged through a supervisors verbal encouragement (Noe, 2008). Accordingly, supervisors can play a role in enhancing training self-efficacy of trainees.

Since Bandura (1977) proposed the self-efficacy theory, it has received widespread acceptance from various subfields of psychology, including clinical, health, organizational and so on, to deal with diverse behaviours under certain contexts (Lee, 1989; Maddux, 1995). Although there was a growing body of articles and researches supporting self-efficacy, it still received criticisms both at the theoretical and practical levels (Marzillier and Eastman, 1984, p. 257; Lee, 1989, p. 116). This section will present the weakness and limitations of self-efficacy theory from the above two aspects.

Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.

Evaluate how different performance and reward strategies might be appropriate for different groups of the organisations.

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