Evaluating HR program analysis based upon reward

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The most important resource that an organization owns in its stake is the human resource which is the main driving force. To maintain well organized and qualified workers in an institution employee performance is checked periodically which is very vital for an organization. Motivated employee can make an organization competitive and more cost effective. This study is an effort to find out what are the major factors behind employee's motivation and what is the relationship between reward , compensation with motivation while working in an organization. The data was collected from different articles and experimental research done on the specific issue. The analysis showed diverse magnitude that motivation and satisfaction are radically correlated where as reward and recognition have a huge impact on the motivation of the employees. The background of human resource practices have been studied in this research

Keywords: Motivation, Job satisfaction, Reward, Recognition.

2. Introduction

Motivation is a major factor that pushes an employee to achieve his/her goals. According to Baron (1983, p. 123), motivation is a processes which gives direction to employees to achieve some specific objective. It is such a vibrant force in today's situation that unambiguously creates a positive impact on job. Within an organization it can be achieved through committed employee who are self motivated. Motivation basically depends on intrinsic as well as extrinsic factors. Tangible incentives are an effective tool in increasing employees performance which gives them confidence of thinking smarter as well as support both quality and quantity of the objectives achieved. Rewards, recognitions and compensation are the key factors that impact on employee motivation. . As the employees engage in their working activities purposely for owns sake then they will feel intrinsic motivation in their behaviors as their activities will essentially be enjoyable and satisfactory (Vansteenkiste, 2005, p. 22). Factors like encouragement and rewards are the ideal factors for employee motivation. This thesis is an effort to focuses on how incentives, rewards and compensation impact employee motivation.

3. Background information

Human resource management is a tactical and rational move towards the management of an organization. The people working individually and together contribute to the success of the business. Human Resource management has evolved rapidly after the industrial revolution. Early human resource management techniques included only social welfare. The shift took off, when companies started to pay more attention to workers' needs. Similarly research stared to begin on personal development and improved working conditions such as motivating employees. Businesses and organizations rely on three major resources: physical (materials), financial (cash, credit) and human resources (workers). HRM is a tool used to make optimum use of human resources. The foundation of human resource is based upon several factors like acknowledgment of every individual, employee are resources they can learn new skills, trained to occupy new positions moreover constantly changing opportunities and employee satisfaction on the bases of rewards and compensation. The major function of human resource is the performance appraisal and activities that employees are engaged into an organization. The basic purpose of appraisal is to provide feedback for the performance which allows employees to evaluate their behavior with their coworkers and managers. Compensation is basically related to paying employees and providing them incentives. Professionals are typically charged with the developing up of wage and salary systems which ultimately motivates employee. The aim is to maximize salary level with performance based incentives therefore HR managers create a balanced system that doesn't slow down morale and that provides sufficient financial motivation to the employees.

4. Related definitions

Intrinsic motivation: Intrinsic motivation refers to motivation that comes from inside an individual.

Extrinsic motivation refers to motivation that comes from outside an individual. The motivating factors are external, or outside, rewards such as money or grades. These rewards provide satisfaction and pleasure that the task itself may not provide.

extrovert :is a person who is energized by being around other people(friendly , helpful)

introvert is a person who is energized by being alone and whose energy is drained by being around other people

5. Problem development

For all the major motivators, money still occupies a rightful place in the above mentioned motivators. People look for job that not only suit their creativity and talents, but compensate them-both in terms of salary and other benefits .The profits generated by the company are divided into various levels like incentives, quality service, or improve the quality of a process within the company. A thing that benefits the company directly benefits the employee. Monetary and other rewards are given to employees for generating cost savings or process-improving ideas. Money is effective when it is directly tied to an employee's ideas or achievement. Monetary incentives can prove counterproductive if not made available to all members of the organization. Therefore the investigation is basically to check that does every organization has the same system of reward and are there any other means of reward apart from monetary rewards.

6. Literature Review

Organizations in today's world seek for balance between employee commitment and performance. The reward and compensation programs serve as the most dependent factor in keeping employees' self esteem high. The fundamental function of managers is to motivate each employee successfully and buck up them to achieve greater efficiency. The motivation and ability to perform in an environment result into rewards. Ability basically refers to education, training, experience and mental as well as physical capabilities of an employee where as rewards; compensation is the factors that confirm that there is a relationship between performance and motivation. According to Wilson (1994) the process of performance management is one among the key elements of total reward system. If an employee performs successfully, it leads to organizational rewards and as a result motivational factor of employees lies in their performance Entwistle (1987). Mostly all the organizations basic requirement is that their employees should work to the rules and regulations. Therefore the research that has been conducted is to find the relationship between compensation and the performance of employees working in an organization. Highly motivated employees provide competitive advantage for the company because their performance leads to the goals that every organization demands. Human resource is the most critical factor that can provide competitive edge as compared to others factors like financial and economic factors. According to Andrew (2004), commitment of all employees is based on rewards and compensation Most of organizations have earned immense progress by staying fully towards their business strategy as well as keeping fair reward and recognition programs for their employees. Deeprose (1994) argued that the motivation of employees and their productivity can be enhanced through providing them effective recognition which ultimately results in improved performance of organizations. The total success of an organization is based on how to keep employees motivated and what are the ways to check the performance of employees for job compensation. The performance of employees has a very crucial impact in today's organizational structure. If we look on another side which is a demotivated environment, where low or reserved employees are working they cannot carry out their skills, nor innovate to the level that an organization needs. . Freedman (1978) said that when effective rewards and compensation are implemented favorable working environment is produced which motivates employees to their performance. Employees personally take rewards as values and pleasure associated to those rewards results in increase of self-esteem of employee which eventually increases productivity of the organizations. In this way employees stay with the organizations thus reducing extra costs of hiring new employees. Reward and compensation programs keep sprits high among employees and make a linkage between performance and motivation. The basic function of reward program is to identify a system and communicate it to the employees so that a relationship exists in their performance which finally leads to job satisfaction. Job satisfaction is basically a pleasure that one attains from being approved from job experiences. Rewards include financial rewards, fringe benefits, promotions and incentives that satisfy employees to some extent, recognition must also be given to keep them appreciated. If we recognize and acknowledge the working capacity of the employees then we have to keep in our mind that rewards are not the only motivator of employee needs but also recognition as they increases the level of motivation through praise and admiration of work employee do. Motivation plays an important role when the organizational workforce is not in a good relationship example. Employees' relation with each other and with supervisor is a key element of the inner strength of the organization. The skill of supervisors is to provide strong leadership which ultimately has a positive effect on job satisfaction of employees. Therefore reward, compensation and incentives are also called the drivers of motivation. Rewards play an important role in determining the performance of a job that is it positively associated with the process of motivation? Lawler (2003) argued that there are two factors which determine how much a reward is attractive, first is the amount of reward which is given and the second is the weight age an individual gives to a certain reward. It is considered that a good manager is who recognizes people by doing things that recognize their activities and the organization reward them something tangible. Probability of promotion according to employee's skills makes an employee more devoted to their work and become a relevant source for the other employees. Bull (2005) posits a view that employees experience success in mentally challenging environment which allows them to use their skills and abilities as a result they experience better job satisfaction. Inducement, rewards and appreciation are the key factor of today's organizations motivation programs as these combine the success aspect of the employees' performance. Promotions create opportunity for growth, responsibilities and social standing. Whereas recognition point to employee motivation respect an employee through appreciation and give them a status of a personality level in an organization. Many skeptics believe that recognition is the most important factor of reward system. Employees certainly stick to their organization as their job give them fulfillment of what they want after having a good rewards and recognition on what they do. Reward adds on the level of productivity and performance of the job. Intrinsic motivation is helpful in producing creative work. Theorist suggests that staffing, job design, performance and compensation systems are the fundamental benchmarks of (HRM). The study is done to investigate whether if rewards or compensation given to employees were to be changed, then there would be a resultant change in work motivation and satisfaction?

7. Problem definition

Determining HR program based upon reward and compensation

8. Statement of Study Objectives

To investigate various way of rewarding employees for performance moreover determining what are different types of rewards that are given to employees.

Non monetary rewards: movie tickets, restaurant coupons, certificates, thanks from the bosses, flexible schedules, a day off( Strategic Management Journal, Vol. 13, No. 5 (Jun., 1992)

Recognition: car allowances, paid parking, (Allen, R. & Helms, M., (Fall 2002)




Job satisfaction, job security,

Monetary Rewards; sales goals, achieving quality, outstanding performance in a given situation, or delivering a special project(Strategic Management Journal, Vol. 13, No. 5 (Jun., 1992)

Read more: Types of Employee Rewards | eHow.com http://www.ehow.com/list_5968180_types-employee-rewards.html#ixzz17GEhTp00

+ ve

Employee participation: communication, decision making, productive

Organization Science, Vol. 4, No. 2 (May, 1993),

Employee Motivation


Performance, emotional appraisal, competiveness

The Academy of Management Review, Vol. 29, No. 3 (Jul., 2004)



Individual Motivation (leadership role)

American Sociological Review, Vol. 42, No. 1 (Feb., 1977),



Competition and Contests

Convenience: soft job, freedom (American Sociological Review, Vol. 42, No. 1 (Feb., 1977))



Opportunities for growth and promotion (American Sociological Review, Vol. 42, No. 1 (Feb., 1977)

Reward and compensation?

Organizational assurance is taken to be one of the primaries and vital structure of the human resource .The employee commitment is the key factor in achieving competitive advantage. From the above framework a significant relationship can be seen between employee motivations with reward compensation. The independent factors are also illustrated which motivates the employees. The independent variable is employee motivation and components of motivation whereas reward and compensation is the dependent variable.

9. On the bases of above mentioned literature review following hypotheses generate

H0: Rewards and compensation have a significant impact on employee motivation and effectively his performance

H1: Rewards and compensation does not have a significant impact on employee motivation and effectively his performance

H2: There is a positive correlation between employee motivation and reward associated with it

H3: there is no or negative correlation between employee motivation and rewards associated with it.

H4: There is a positive correlation between working motivation and satisfaction

H5: There is a positive correlation between recognition and working motivation

Independent variables and signs



Convenience (+)

Anything that saves or simplifies work, adds to one's ease or comfort

American Sociological Review, Vol. 42, No. 1 (Feb., 1977

Individual Motivation (+)(leadership role)

Purpose and direction to behavior.

American Sociological Review, Vol. 42, No. 1 (Feb., 1977),

Performance, emotional appraisal, competiveness


The execution or accomplishment of work

The Academy of Management Review, Vol. 29, No. 3 (Jul., 2004)

Monetary Rewards (+)

Financial gifts

Strategic Management Journal, Vol. 13, No. 5 (Jun., 1992)

Non monetary rewards (+)

Non financial gifts

Strategic Management Journal, Vol. 13, No. 5 (Jun., 1992)

Recognition (+)

the acknowledgment of achievement

Allen, R. &Helms, M., (Fall 2002)

Employee participation (+)

Individual contribution

Job satisfaction (+)

Pleasure from work place

Opportunities for growth and promotion (+)

Advancement in rank or position

American Sociological Review, Vol. 42, No. 1 (Feb., 1977

10. Elements of Research Design

Type of Research: Applied

Study setting: Natural

Nature of Data: Secondary

Unit of Analysis: Institutions

Reference period: 1977-2004

Data reliability: Secondary

Statement of Analytical Approach: articles

11. Expected nature of findings

The main objective of the research was to find the impact of reward and compensation on employee motivation. Analyses from the finding have shown that relationship does exist between work motivation and satisfaction. Looking it from other perspective some employees think that there is a less chance of appreciation. salary increments, payment, bonuses, fringe benefits and other compensations keeps their spirits high and makes them more motivated towards work.

12. Limitations

The limitations for this study are to be stated as. The data has been collected on online base which have produced different results. Motivation of employees may change with growing experience. The study comprised of overall dimension of reward compensation. Future study must focus on collecting the data from different managerial levels. Economic factor must also be considered, like inflation rate, unemployment level. The study must be replicated indifferent cultural and organizational levels. Lastly data wasn't available on this specific issue which has taken a lot of time.