Extrinsic Rewards For Employee Performance

INTRODUCTION

“Life is a game. Money is how we keep score” says Ted Turner, a billionaire. One of the most debatable statement in human resource management is whether that money really matters to the employees. Extrinsic rewards may enhance employee performance, however it could not be the only factor.

Over the years, research has been done on organizational behavior and HRM under which pay for performance {PFP} is scrutinized where the results are sparse and desultory (Gupta & Shaw, 2014). Improved business performance may or may not pertain to enhanced employee performance (Hansen, 2008). The human perception of searching in the light rather in the dark results in analyzing the evidence that is present. There is no qualitative analysis on the influence of intrinsic motivation on performance, and to what extent do incentives control performance is also obscure (Cerasoli, Nicklin, & Ford, 2014). Evidence from the 1990’s suggests that financial incentives are effective and does not curtail intrinsic motivators, and likewise recent studies prove incentives to be much more effective (Shaw & Gupta, 2015).

A number of questions arises. Is it true that money is of prime importance for an employee? Is performance and motivation of employees achieved only through monetary benefits? What are the intrinsic and extrinsic drivers in employee motivation? But first, we need to understand what motivation and performance are in this context.

MOTIVATION AND PERFORMANCE

An improved business performance is achieved through collective use of employee power to produce desired results with utmost efficacy. An employee’s performance is judged based on subjectivity and interdependency (Campbell, Campbell, & Chia, 1998), yet it all comes down to the m...

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...money demotivates and curtails performance by spoiling the moral and purpose.

The assumptions considered in the study are irrelevant for the majority of organizations (Hansen, 2008). The studies mentioned above which are undermining the effect of PFP have been conducted in non-work settings which could not apply in workplaces (B. Gerhart & Fang, 2014). The research findings fail to appeal as it is unreliable in work conditions noting that they are inconsistent and cannot be regarded as a standard approach to PFP plans.

Incentives may not work as planned, it could depend on factors like system study, design, and implementation (Shaw & Gupta, 2015). For the incentive system to work efficiently the system has to be a proper interpretation of the study, the design has to be adept i.e., it has to be complete, responsive and objective, and implemented in a productive way.