Literature Review The importance of rewards system and its impact on employees PDF

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Literature Review The importance of rewards system and its impact on employees Muhammad Ilyas According to Edward (1993) Employees don’t work for free, most businesses are not volunteer services, so you have to compensate them in some way for their time and efforts that we call rewards. Rewards syst...

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Literature Review The importance of rewards system and its impact on employees Muhammad Ilyas

According to Edward (1993) Employees don’t work for free, most businesses are not volunteer services, so you have to compensate them in some way for their time and efforts that we call rewards. Rewards systems are often used within organizations as a key management tool that can affect a firm’s effectiveness by influencing employees, behavior and motivating employees at their work place (Ibrar, Owais 2015). The Nathaniel et al. (2010) authors defined the rewards is the method of evaluating and compensating employees based on their performance. Tze et al. (2012) further said that Reward is the compensation which an employee receives from an organization for exchanging of the service offered by the employee or as the return for the work done. The author Arran et al. (2015) defined rewards include all the valuable outcomes that employees derive from their work, including base pay, incentives, non-salary benefits. The author Puwanenthiren (2011) concluded that the higher will be the employ reward the more the employ will be motivated and Lower the employee rewards lead to lower the Employee Motivation. According to Rizwan and Usman (2010) said that the reward system can motivate an employee in the organization. In other words, reward systems seek to attract people to join the organization to keep them coming to work, and motivate the employees to perform to best levels (Puwanenthiren 2011). Reward can increases worker performance and the rewards can improve employee performance in very best manner (Arran et al. 2015). Rewards is a part of the business plan by which we can attract, retain and motivate the employees to achieve their success in our life, as well as contributing in meeting the company’s objective (Ong et al. 2012). According to Ibrar and Owais (2015) there are two types main rewards. • The intrinsic rewards (Non-Financial rewards) • The extrinsic rewards (Financial rewards) The intrinsic rewards (Non-Financial rewards): Non-financial rewards are non-cash and it is a social recognition such as acknowledgement, certificate, and genuine appreciation etc, only the financial rewards are not important the employees also giving more value to the attitude and behavior their managers. Ibrar and Owais ( 2015). Tze et al. (2012) mention that The support and recognition given by leader play very important role in the motivation of the organization employee.

The extrinsic rewards (Financial rewards): Extrinsic rewards are tangible rewards and these rewards are external to the job or task performed by the employee. External rewards can be in terms of incentives, bonuses, promotions, job security, etc. (Nadia et al, 2011) Objectives of reward system: The Edware (1998) and Agwu (2013) concluded that the reward systems having the following major objectives. 1. 2. 3. 4. 5. 6. 7.

Attracting and retaining employees. Motivating performance. Promotion skills and knowledge development. Improving performance. Employee’s satisfaction. Encourage employees. Controlling of labor cost.

CONCLUSION The reward is more important of any nature of business, organization, institutions, very beneficial for the employees’ job performance. It is natural process that human performance is based on motivation and motivations are connected with reward system. So, in the presence of reward the better will be the quality and productivity of an organization performance.

References

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Ibrar.M and khan.O (2015). The impact of reward on employee performance. international letter of humanistic science . (52) 95-103

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