Employee productivity and performance rests on motivational approaches and reinforcement strategies towards achieving organizational goals.
Extrinsic rewards relate to the positive outcomes of a group or individual’s productivity in a work setting. John and Leavitt (2001) argue that these rewards reinforce the emotional attachment of an individual or group to work and directly influence the performance levels respectively. Pay compensations or benefits take the form of extrinsic rewards. This spans positive compensation and impact on individual or group performances. Intrinsic rewards span direct positive rewards an individual gets as a result of excellent job performance.
Pay is a complex extrinsic reward strategy. Employees felt that their skills and efforts are recognized when they are adequately compensated. This strategy leads organizations to maintain the best skilled and talented workers. Improved workplace productivity is the result. On the other hand job dissatisfaction has a detrimental effect on the physical and mental health of an employee and is likely to create employee absenteeism, which may cause employee underperformance, high employee turnover, and absenteeism from work (Weitzel, 2004).
Performance reinforcement strategies are diverse. One of these, merit pay is a performance-based compensation strategy where adequate compensation is commensurate with performance accomplishments. Based on the accurate and realistic performance index of an employee, merit pay is a positive performance reinforcement strategy though it comes with its demerits. Kohan and Mazmanian (2003) in their argument see this as focusing on individual performance and failing to identify task interdependency with the overall effect of creating dissatisfaction among unrewarded employees. This, therefore, gives rein to other motivation reinforcement strategies based (John & Leavitt, 2001).
Gainsharing is a performance enhancement strategy tailored to benefit an employee based on workplace productivity levels and bonuses gained. Employees are given a share of organizational benefits. This approach creates a greater sense of individual responsibility towards performance improvements at the workplace. The approach has the merits of encouraging and improving team cohesion, teamwork, singleness of purpose, and team cooperation. One demerit of this approach is the effect of rewarding failed performances. That was the case with Home Depot when it released CEO Robert with a huge payoff when the firm was underperforming. This is a negative example of the effects of rewards.
On the other hand, the profit-sharing approach is based on overall organizational profits. The strength of this approach is its dependency on organizational profits. Higher pay comes with more profits. Its weakness lies in the effect on employee incomes when an economy underperforms (John & Leavitt, 2001).
Employee stocks ownership plans focus on employees owning shares in the company that employs them. The weaknesses of this strategy are the risks associated with retirement and economic underperformance. Its strengths lie in a motivational impact on employees to work hard to gain more when prices rise. An example is where ESOPS employees own stock n their employers’ business.
Bonus is an approach that is now being extended even to lower ranks employees where when a certain standard is achieved, an employee is compensated with a specified sum of money. The strengths lie in encouraging employees to become more productive in setting and achieving specific goals. The demerit lies in de-motivating employees who may reach the established benchmark.
According to John and Leavitt (2001), the performance approach of lump-sum pay rises and payments incorporates one’s choice of pay increase approaches at a given point in time. In addition to that lump-sum pay incorporates bonuses paid at a specific point in time determined by management.
References
John, G. & Leavitt, W. (2001). Building on success. Transforming Organizations Through an Appreciative Inquiry. Public Personnel Management. 30(1). 29.
Kohan, A. & Mazmanian, D. (2003). Police Work, Burnout, and Pro-organizational Behavior. A consideration of daily work experiences. Criminal Justice and Behavior. 30(5).559.
Weitzel, T.Q. (2004). Managing the Problem Employee. FBL Law Enforcement.