The performance of an organization's employees is crucial to the organization's long-term success in putting its business strategy into action and in maintaining its edge over its competitors (Danish & Usman, 2010). The provision of monetary rewards, such as pay and bonuses, is typically emphasized by employers in an effort to encourage workers to attain high levels of productivity (Imran, Ahmad, Nisar, & Ahmad, 2014).
However, non-financial benefits, such as praise and recognition, are frequently neglected in this context and despite the fact that financial incentives have been shown to positively promote performance-enhancing behaviors and to some extent satisfy employees, significant basic research has proven that recognition is important for keeping employees motivated, valued, and committed (Danish & Usman, 2010).
This is especially true for employees who have demonstrated a dedication to their jobs (Luthans, 2000). Employee recognition, in addition to having a significant positive correlation with employee performance, has been demonstrated to be an effective motivational tool that boosts employees' efforts toward achieving the goals and objectives of the organization (Harrison, 2005). This is the case despite the fact that employee performance and employee recognition do not have the same meaning (Imran, Ahmad, Nisar, & Ahmad, 2014).
According to Harrison (2005), recognition is the timely, informal and/or official acknowledgment of an employee's conduct, effort, or business result that advances the organization's goals and values and exceeds what is considered "normal." This definition of recognition can take place in either a formal or an informal setting and acknowledgment is described as a positive reaction and evaluation of an individual's work. This evaluation can be official or informal, one-on-one or in a group, private or public, monetarily or in another form (Nyakundi, Karanja, Charles, & Bisobori, 2012).
This
includes, but is not limited to, a person's work performance, their personal
devotion, and their level of participation (Brun & Dugas, 2008). Employee
recognition programs are designed to accomplish a number of goals, including
fostering a sense of ownership and belonging among workers, boosting morale and
loyalty, and increasing the likelihood that workers will continue to be
employed by the company (Harrison, 2005). These goals can be accomplished by
letting workers know and understanding that their work is respected and
appreciated (Nyakundi, Karanja, Charles, & Bisobori, 2012).
It has been discovered that recognizing employees' efforts can be an effective method of motivating them, which in turn can boost the happiness levels of individual workers as well as the firm as a whole (Zani, Rahim, Junos, Samonol, Ahmad, & Merican, 2011). According to Freeman (1978), a healthy working environment is formed when employees are suitably recognized, which drives them to be dedicated to their work and perform at a high level. This, in turn, generates a healthy working environment. Employees that are motivated to do their best work are a company's greatest asset because they help the organization realize its objectives, be successful in implementing its business strategy, and prosper overall (Danish & Usman, 2010; Imran, Ahmad, Nisar & Ahmad, 2014).
Employees who do not feel inspired to perform their best work are less likely to take initiative, develop novel approaches to problem-solving, and focus all of their attention and effort on the task at hand. It has been established that non-monetary rewards such as acknowledgment have a favorable correlation with employee work satisfaction as well as the success of the firm (Erbasi & Arat, 2012; Ngatia, 2015; Tausif, 2012). According to Imran, Ahmad, Nisar, and Ahmad (2014), when employees are happy with both their jobs and the organization as a whole, they are more invested in both aspects of their work and produce better results. When employees are satisfied with their jobs and the organization as a whole, the organization as a whole benefits.
References
Brun, J. P.,&Dugas,
N.(2008). An analysis of employee recognition: perspectives on human resources
practices. The
International Journal of Human Resource Management, Vol. 19 No. 4,
pp.716‐730.
Freedman, M. S.
(1978). Some Determinants of Compensation Decisions. The Academy
of Management.
21397- 409.
Erbasi, A. &
Arat, T. (2012). The effect of financial and non-financial incentives on job
satisfaction: An examination of food chain premises in Turkey. International
Business Research,
5(10), p136.
Luthans, K. (2000). Recognition:
A powerful but often overlooked leadership tool to improve employee performance. Journal of
Leadership Studies, Vol.
7(1).
Danish, R.Q., &
Usman, A. (2010). Impact of reward and recognition on job satisfaction and
motivation: An empirical study from Pakistan. International Journal of
Business and Management, 5(2):
159
Imran, A., Ahmad S.,
Nisar, Q. A. & Ahmad, U. (2014). Exploring Relationship among Rewards,
Recognition and Employees’ Job Satisfaction: A Descriptive Study on Libraries
in Pakistan. Middle-East
Journal of Scientific Research, 21 (9): 1533-1540, 2014
Harrison, K. (2005).
Why Employee Recognition is so Important. Retrieved from www.cuttingedgepr.com
Nyakundi, W. K.,
Karanja, K., Charles, M., & Bisobori, W.N. (2012). Enhancing the role of
employee recognition towards improving performance: A survey of Keyatta
National hospital Kenya. International
Journal of Arts and Commerce, 1 (7).
Tausif, M. (2012).
Influence of Non Financial Rewards on Job Satisfaction: A Case Study of
Educational Sector of Pakistan. Asian Journal of Management Research, 2(2).
Zani, R., Rahim,
N.A., Junos, S., Samonol, S., Ahmad, S. S., Merican, F.M. (2011). Comparing the
impact of financial and nonfinancial rewards towards organizational motivation. Interdisciplinary
Journal of Contemporary Research in Business , 3(4), 328-334.
Agreed. Total reward, as defined by Armstrong and Stephens (2006, p. 7), is the combination of all benefits provided to employees, including monetary and non-monetary (Armstrong and Stephens, 2006, p. 7). Many people have reported that the outdated pay-reward system has been gradually transformed into the comprehensive compensation scheme since the year 2000. This is largely because a new class of workers known as Generation Y, who were born between 1978 and 1988, developed a new attitude based on their own needs and wishes (Bowen, 2000).
ReplyDeleteThank you for commenting on my Blog Ranga. There are four categories of rewards most frequently associated with change programs such as six sigma: intrinsic, extrinsic, social, and organizational rewards. Organizational rewards are the very reason that most companies implement six sigma in the first place, and include the bottom‐line business results of improved quality, productivity and profits (Buch and Rivers, 2001).
DeleteAgreed with the content. Further, businesses utilize reward management in a number of methods, some of which combine monetary and non-monetary advantages, to enhance employee performance. In order to improve performance, businesses use reward management tactics, which include compensation and perks. Compensation is any reward or incentive given to an employee in exchange for their services to an employer. Frequently, it is based on compensation, incentives, or bonuses (Arthur, 2007).
ReplyDeleteGlad to receive your comments Prabuddha. Adding to above, Extrinsic rewards are those that employees receive from their organization or management as a result of their performance or participation. These rewards can take many forms, some direct and indirect. Direct rewards most often associated with employee participation in programs such as six sigma include recognition from management and small tokens of appreciation and acknowledgement, such as key chains or movie tickets (Larson, 2003).
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