Impact of reward system and punishment on employee motivation

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Impact of reward system and punishment on employee motivation

Impact of reward system on employee motivation

Beginning of managing people in organization goes back to craft era. It evolved from personnel management to human resource management. Organisation find stable market very rarely. To face unstable market, organisation needs non imitable assets. That means human resource. To reap the best from the employee, organisations should motivate them. One way is to motivate them by rewards and recognition. According to Eshun and Duah, even though rewards and recognition is seemed to be common, it is complex and painstakingly difficult because, the work environment is complex and is made up of a heterogeneous workforce. Hence organisations should do in depth analysis prior to award rewards and recognition. (Akafo and Boateng, 2015) In other words rewards system attract people to the organisation.

Organisation reward system consist of extrinsic and intrinsic motivational factors. Main reason being motivation factors differ from person to person. Some of the extrinsic rewards are compensation, benefits, and promotions. On the other hand, intrinsic motivational factors are meaningfulness, choice of autonomy and growth.

If organisations manage to build up a reward system which is suitable for all the employees it will ultimately enhance the employees performance. In addition to that it will help to redefine the employees’ attitude towards the employer and develop the behaviour. In addition to that it will directly impact to the wellbeing of the employee. Ultimate result of all these will be sustainability of the organization

Below figure will give further insight regarding reward system.

Figure 01


(Franco-Santos and Gomez-Mejia, 2015)

 

Impact of punishment on employee motivation

 

Punishment to an employee means his or her behaviour is not acceptable. It often has immediate effect on correcting employee poor habits. Punishment has long term benefits. Before providing punishment to the employees, the reasons for the punishment should be communicated with the whole layers of employees. That means higher level employees and lower-level employees. But punishment is more debatable. Researchers suggested that there is both positive and negative impact on punishment towards employee motivation. Punishment will bring positive impact on specific instances and individual punishment will bring positive impact on whole of employees. On the other hand, frequently punished employees could emanate negative energy within the organisation and could also work in a manner that would tarnish the image of the company. Angry or dissatisfied employees do not contribute their fullest to the company and the organisation would be unable to see their real potential (Macnamra, Meloso, Michelotti and Puncheva-Michelotti, 2021) (Zhao and Pan, 2017)

 

According to BF skinner and his associates, punishment implies removing positive consequences so as to lower the probability of repeating undesirable behaviour in future. Similarly, punishment means applying undesirable consequence for showing undesirable behaviour. For instance - suspending an employee for breaking the organisational rules. Punishment can be equalised by positive reinforcement from alternative source. (Juneja, 2022)

Punishment to employee in workplace may be tangible or Intangible. Verbal and written warnings, pay cuts, demotion or suspension from work, nagging employee to complete work are examples for punishments.

 

Reward Vs Punishment

Even though punishment was used in various situations to motivate employees, according to research done by business news daily in 2012  found that companies believe that reward system has better outcome than punishment. Employees may react to the punishment by increasing production or performance. However, fear and frustration may lead an employee to a negative work culture. That means rewards bring out positive behaviour and motivation in the long run. Punishment will lead to lower morale and less productivity in the long run since punishment motivate employee temporarily. (Kokemuller, 2013)

 

References

 

Akafo, V. and Boateng, P.A., 2015. Impact of reward and recognition on job satisfaction and motivation. European Journal of Business and Management, 7(24), pp.112-124.

Franco-Santos, M. and Gomez-Mejia, L., 2015. REWARD SYSTEMS. Wiley Encyclopedia of Management, [online] 5. Available at: <https://www.researchgate.net/publication/304570009_Reward_Systems> [Accessed 30 April 2022].

Juneja, P., 2022. Reinforcement Theory of Motivation. [online] Managementstudyguide.com. Available at: <https://www.managementstudyguide.com/reinforcement-theory-motivation.htm> [Accessed 30 April 2022].

Kokemuller, N., 2013. Examples of Discounting Principles. [online] Your Business. Available at: <https://yourbusiness.azcentral.com/examples-discounting-principles-28974.html> [Accessed 1 May 2022].

 

literature. SAGE Journals, [online] 75(2). Available at: <https://journals.sagepub.com/doi/full/10.1177/00187267211007891> [Accessed 29 April 2022].

Macnamra, T., Meloso, D., Michelotti, M. and Puncheva-Michelotti, P., 2021. ‘You are free to choose . . . are you?’ Organisational punishment as a productivity incentive in the social science

Pratheepkanth, P., 2011. Reward System And Its Impact On Employee Motivation In Commercial Bank Of Sri Lanka Plc, In Jaffna District. Global Journal of Management and Business Research, 11(4),

Zhao, B. and Pan, Y., 2017. Cross-Cultural Employee Motivation in International Companies. Journal of Human Resource and Sustainability Studies, [online] 5(4). Available at: <https://www.scirp.org/journal/paperinformation.aspx?paperid=80524#ref14> [Accessed 29 April 2022].

Comments

  1. GaminiHemachandraMay 3, 2022 at 12:08 PM

    Reward systems play an important role in increasing employee motivation and providing a reason for them to perform better. Reward is one of the most important key point in human resource management that contributes to global success. Employee formal rewards are one of the most important human resource management practices. Extrinsic and intrinsic rewards are part of the reward system. Extrinsic rewards include wages, bonuses, and promotions that employees receive as part of their job. Intrinsic reward is associated with the satisfaction that comes from actually performing the work, such as responsibility, meaningful work and achievement (Ibrar and Khan, 2015)
    Reference; Ibrar, M. and Khan, O. (2015) The impact of reward on employee performance (a case study of Malakand Private School). International letters of social and humanistic sciences, 52, pp.95-103.

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