Employee Incentives and Rewards

Employee Incentives and Rewards
Institutional Affiliation
Employee Incentives and Rewards
The organizations have the responsibility of creating a work environment that recognizes
and appreciates efforts. The incentives and rewards are used by the human resource to motivate
the employees to be productive. Each firm has its plans that are aimed at motivating the
personnel to increase their effort while at work. The incentives and rewards vary across
organizations, but they are aimed at increasing performance and influencing the behavior of the
employees in the work environment.
Types of Reward System
Intrinsic. The intrinsic rewards are aimed at increasing the satisfaction of an individual.
They give the employees a sense of pride that helps them feel accomplished with the current
circumstances in the work environment (Fulghieri & Sevilir, 2010). The type of rewards a
chance for personal growth, which is significant in helping the employee to be productive in the
work environment.
Extrinsic rewards. They are incentives given to the employee to encourage them to
work hard, and they include money or a work promotion. The management provides the rewards
to the employees (Fulghieri & Sevilir, 2010). Each wants work in an environment that
understands for example, that when the profits increase the firm also gives the salaries of the
labor force some consideration that will help them to be productive in the future.
Financial. They are aimed at enhancing the financial ability of the employees. If, for
example, during the close of the year the firm realizes that they made more profits they can
encourage the employees by giving them a bonus or an increase in wage (Fulghieri & Sevilir,
2010). When the employees are aware that the organization has taken into consideration their
needs, it will encourage them to be productive, and this will increase the number of profits that
are generated by the enterprise.
The nonfinancial rewards. The type of reward is aimed at increasing the attractiveness
of the organization. Research indicates that the nonfinancial reward systems attract more
employees as compared to the other forms that are available. The type of reward may include a
good pension plan for the employees, proper medical care insurance, and staff restaurant
(EASTERN, 2012). The rewards show that the employer is concerned about the overall well
being of the employees.
Performance-based. The rewards are based on either the performance of the employees
or the criteria of membership. The performance-based can be exemplified through the use of
group bonuses and performance plans of the employees.
Membership Rewards. The rewards take into consideration an increase in salary and are
based on the status and seniority level of the individual entitled to receive the compensation.
They are important for the organizations that want to retain the future potential of the employees
in the work environment.
A Comparison of the Reward System of Organizations.
At the beginning of the year 2018, Amazon Corporation announced a plan to improve the
services of the employees of the company who work in the United States. The procedure
involved a partnership with JPMorgan Chase, Berkshire Hathaway in a bid to cut the cost of
health care and thus improve the service of the employees. In Germany Amazon has a monthly
bonus that is given to the employees of the organization who work in Germany and the rates
range from (6 to 10%). The bonus depends on the number of sick days an employee has used
during the month of operation. The intention is to minimize the number of people who are absent
from work because it affects the normal operations of the organization (LaVito & Cox, 2018).
The reward system has helped Amazon achieve its goals as productivity is increased and it is
reflected in the revenues of the organization. At present, the total income generated from the
foreign operations by Amazon has exceeded (30%). It is evident that in Amazon improving the
working conditions of the employees involves the minimization of costs as a way to reduce the
overall costs in the working environment.
MC Donald’s
At the beginning of the year 2018, The McDonald corporation introduced a new reward
system that is aimed at improving the education system of the employees. The company has
pledged $ 150 million over the next five years to support the school college tuition of the
employees. The causes are as a result of the changes that have taken place in the tax laws of the
United States. The benefits that were previously tied in the tax reform will be used to benefit the
employees of the organization. The incentive is an addition to the company’s “ Archways to
opportunity” program that has been supporting education. The crew members of the restaurant
will thus get a raise from $ 700 to $ 2,500 annually in tuition. The store managers will get
$3,000 from $1,050. The hourly requirements will also be lowered from 20 hours annually to 15
hours per week. The additional incentives are aimed at helping the employees to study,
especially with the increased cost of tuition fee, many people are not in a position to afford the
school fees. As a result, the MC Donald stands a chance to attract the best employees in the
industry who will be motivated to work for the organization and thus contribute to the increased
revenues that will aid in the growth and the performance of the enterprise.
Apple has also announced that it will be adding extra benefits to the current offered by
the organization. Some of the benefits that will be offered to the employees include the
lengthening of the parental leave, reimbursement of the college education and the stock perks
that will be offered to the families in case an individual dies. The HR manager of Apple Denise
Young Smith confirmed the announcement to Fortune by sharing a memo. The benefits will
address all the four generations of the workforce. Apple at present employs about (98,000)
employees a majority work on an hourly basis at the retail stores of the organization. Some of the
new benefits that will be offered by Apple include the student loan refinancing program for the
employees of the United States that are aimed at easing the financial burden for the college
graduates and the parents who have children in colleges (Hein, 2018). The full-time employees
will be entitled to Maternity and new parental leave options which will be increased by four
weeks before the due date of the mothers. After the delivery, it will increase from (12 to 14)
weeks with full pay.
The Google reward system includes a transparent corporate culture, international
opportunities and empowering the environment. Information released recently indicate that most
of the companies have copied the reward system of Apple ("Employee rewards and recognition -
what does Google do?", 2018). Facebook and other technology companies have also embarked
on a move of developing a culture at work that rewards the employees to increase motivation.
Research carried out by previous scholars indicate that the traditional reward systems that
were used by the organization are no longer attractive to most of the employees because of the
changing needs of the present. The standards of living, for example, have increased and the cost
of health care is on the rise. With the increase in the number of people suffering from lifestyle
diseases at an early age, health insurance has become a priority for most of the employees. When
the employees have good insurance even if they are not paid the way they will also be assured
that if any of the family members fall ill, the patient will be treated and they will not have to
worry about the costs that will be incurred (Došenović, 2016). Because the future health of the
employee is prioritized, they will be relaxed at work, and they will be more productive in the
work environment. As a result, the organization will achieve the goals in line with the mission
and the objectives of the organization.
The other incentives that have become common in the modern work environment involve
the reimbursement of a college education. In the United States, for example, a majority of young
people are finding it challenging to graduate from college because of the increased cost of
education. The employers that reward the employees with reimbursement in college the
education, encourage young people to study, and in the process, they gain skills that if brought
into the work environment will increase productivity. Through study, the young people get
confidence which helps them to perform tasks well in the work environment and in the long run I
helps the firm to achieve its goals (Chapman & Kelliher, 2011). Management should thus
research to obtain information that will help them to decide the best reward for the employees
because in each organization the needs are different. If a majority of the employees are young a
reimbursement in education will motivate them if they are older a health care system should be a
The Role of Rewards in Organizational Performance
Mutual benefit. The reward system is a two-way process because it benefits the
employee and the organization. The employees of the organization get motivated when they are
appreciated, and this increases their productivity and in the long run, helping the organization
achieve the goals. The employers must, therefore, understand that the reward system is a
necessity, especially in the modern organization where information sharing has become quicker,
and the employees of the corporations have information regarding the organization that offers the
best incentives and rewards (Chapman & Kelliher, 2011). If the management does not maximize
on this, it will lose the best employees to the competitors, and this will affect future performance.
Increased motivation. The reward systems put in place by the organization are aimed at
increasing the motivation of the employees and thus helping them to work hard so that they can
achieve the goals in line with the mission and the objectives of the organization. Most of the
reward system of the organization is based on the ability of the individuals to perform (C. Balaji,
2012). As a result, the employees will work hard to prove to the organization that they can
achieve growth in the long run.
Reduced level of absenteeism. The incentives and rewards offered by the organization
are aimed at encouraging the employees to provide better services thus reducing low labor
turnover. Appreciating the employees increases their confidence, and this helps them to work
hard to achieve the goals. The employees of the organization will be clear regarding the
intentions, and they will work collectively to attain the goals of the organization. When the
employees are absent from work they are not able to finish their work in time, and this will affect
productivity. If you consider the situation in the work environment all people work as a team and
an input of a junior employee is used by management to make strategic decisions of the
organization. When people fail to give reports in time, it will affect all the activities and in the
long run, affect the performance of the enterprise. The reason why most people are absent from
work is that they are unsatisfied with the working conditions and thus cannot offer better services
affecting the ability of the organization to achieve the goals in line with the mission and the
objectives of the organization (C. Balaji, 2012). The human resource must research, obtaining
formation that relates to absenteeism and implements measures that are aimed at increasing the
progress and promoting growth in the long run.
Increased morale of the employees. Research indicates that organizations that have
implemented reward system boost the morale of the employees. It is quick for the leaders to
convince them to work for a common goal because they are aware that the firm has taken into
consideration the needs of people and in return, the productivity of the organization is increased
(Barrabi, 2018). Most people will work well when they are appreciated and when the
organization makes more revenues the rewards should be even more so that they do not have the
feeling that the organization has not taken into consideration their needs.
Teamwork. The reward system increases the spirit of teamwork. The current
environment of business is competitive, and the organizations need to coordinate the employees
and encourage them to work in teams because they come up with ideas that help the organization
to achieve the goals in line with the mission of the organization. Their own needs motivate each
firm, and it is the responsibility of the employer to put in place the mechanisms that are aimed at
increasing productivity (Hein, 2018). Some organization monitors individual progress, but
teamwork has proved out to be the most effective in meeting the goals of the organization within
a short period.
The goals of the organization are aimed at increasing revenues that will aid in the growth
and the expansion of the business. The firm achieves growth by the effort made by the
employees because they contribute to the ideas that if implemented will help the enterprise to
achieve the goals. When the human resource takes the initiative to appreciate the effort of the
employees, it increases the motivation and as a result, helping the management of the
organization to achieve the goals in line with the mission and the objectives of the organization.
In the present technology has increased information sharing and the employees share information
and have ideas about the organizations that reward their employees in the work environment.
The companies that want to experience growth in the future should invest in the needs of the
employee because it will help the organization to retain them for an extended period and hence
help the firm achieve the goals.
Barrabi, T. (2018). Tax reform windfall: These companies are hiking pay, delivering bonuses.
Retrieved from https://www.foxbusiness.com/markets/tax-reform-windfall-these-
C. Balaji, C. (2012). Employee Welfare and Rewards on Job Satisfaction and Productivity A
Pragmatic Approach. International Journal Of Scientific Research, 2(1), 20-21. doi:
Chapman, J., & Kelliher, C. (2011). Influences on reward mix determination: reward consultants'
perspectives. Employee Relations, 33(2), 121-139. doi: 10.1108/01425451111096677
Došenović, D. (2016). Employee Reward Systems in Organizations. ECONOMICS, 4(1). doi:
EASTERN, J. (2012). Employee Rewards. Skin & Allergy News, 43(1), 27. doi: 10.1016/s0037-
Employee rewards and recognition - what does Google do?. (2018). Retrieved from
Fulghieri, P., & Sevilir, M. (2010). Mergers, Spin-Offs, and Employee Incentives. SSRN
Electronic Journal. doi: 10.2139/ssrn.1710230
Hein, B. (2018). Apple rolls out cushy new benefits to its 98,000 employees | Cult of Mac.
Retrieved from https://www.cultofmac.com/298545/apple-increases-benefits-keep-top-
LaVito, A., & Cox, J. (2018). Amazon, Berkshire and JPMorgan Chase to team in landmark new
health care company. Retrieved from https://www.cnbc.com/2018/01/30/amazon-

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