In today's competitive business environment, the ultimate objective of a business is to create a workplace environment that is filled with both natural work reinforcers (intrinsic) and external rewards and recognition, all directed to those behaviors necessary to achieve results that make a difference. In achieving this, companies rely on different reward-systems. It means that companies are seeing the compensation program differently then 'just paying for performance'. .
Reward systems need to have a positive impact on behavior. To accomplish this, companies today formulate reward systems that are:.
1. Contingent on achieving desired performance levels rather than on merely doing certain tasks; .
2. Meaningful and valuable to the individual; .
3. Based on objective and attainable goals; .
4. Open to all, and not based on a competitive struggle within the workplace; .
5. Balanced between conditions in the workplace (extrinsic) and fulfillment of individual needs and wants (intrinsic);.
Today such reward system requires show a combination of several groups of incentives, the most important of which are: .
1. Recognition-both monetary and non-monetary. .
2. Social prestige. .
3. Achievement. .
4. Self-esteem.
Companies also use the concept of intrinsic rewards when establishing a reward system. Such rewards are the good feelings people get from doing their work; enjoyment of the task, excitement about the opportunities, and pride in doing a good job. .
Companies are today acknowledging that employees can feel rewarded in many ways, not merely with cash. For top performers, increased responsibility and lessened supervision can be rewards in themselves, as can flexible schedules, additional time off, first pick of desirable assignments, and so on. .
This has led to informal reward systems designed to give employee's more of a personal thanks, usually from their direct supervisor, as opposed to a raise or promotion. The informal incentive system has been show to have a number of benefits over the traditional reward system.
