Organizational rewards often are both intrinsic and extrinsic. Intrinsic rewards include one s work and satisfaction with one s performance, which

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3 Human resource management (HRM) is important to an organization s strategic success. It deals with the formal systems of human resource (HR) planning, staffing, compensation, benefits, and implementing policies. Human resource development (HRD) is similar to human resource management, but its focus is on employee management development, improved performance, training and development, and aligning skills to development to achieve strategic goals. Human capital is one of the most important resources in an organization's success, yet a major challenge for human resource management is to hire and retain employees. Virtually every organization has a performance system that is expected to attract, retain, and motivate employees to achieve the organization s goals (Lawler as cited in McEwan, 2015, p. 396). 3

4 Motivation is an important aspect of achieving organizational goals and productivity. Rewards are important to motivate employees to contribute their best efforts to innovation and improve a company s performance (Smit, Stanz, & Bussin, 2015). Research literature identifies the factors of a reward system, which usually involve 1) equity in compensation, 2) performance standards, and 3) team and individual rewards (McEwan, 2015). Employees will give their best performance when they trust that management will reward their efforts through compensation, recognition, important projects, and other incentives they value. Management should constantly monitor reward systems to evaluate performance and to align them with employee goals and productivity. 4

5 Organizational rewards often are both intrinsic and extrinsic. Intrinsic rewards include one s work and satisfaction with one s performance, which results in a self motivated ability to influence autonomy and respectability. Extrinsic rewards include promotions, power and prestige, monetary benefits, opportunities to attend conferences and empowerment seminars, and opportunities to collaborate with senior organizational members (Bridges, 2006). 5

6 Motivation and inspiration provide the energy necessary to achieve grand visions (Kotter as cited in Osuoha, 2010). This motivation and inspiration is not by forcing people in the right direction as control mechanisms, but by satisfying their most basic needs of achievement. A manager can inspire workers through a sense of belonging, recognition, self esteem, a feeling of control over one s life, and the ability to live up to one s ideals. 6

7 Several motivational theories exist that one should become familiar with. Maslow s theory indicates a hierarchy of needs pyramid of five basic needs: 1) psychological, 2) safety, 3) social, 4) esteem, and 5) self actualization. A manager should meet and satisfy each need, one at a time, in hierarchal order, before moving to the next level. 7

8 The path goal theory suggests a leader should make valuable rewards available to employees, and explain the behaviors necessary to earn the rewards. Subordinates will react favorably to leaders who will help them make progress towards specific goals by clarifying the paths to such rewards (Greenberg, 2002). The path goal theory suggests that leaders can adopt four basic styles that include instrumental or directive style, supportive style, participative style, or achievement oriented style to increase motivation and enhance performance. Interestingly, the path goal theory will enhance a follower s motivation, but only to the extent he or she makes progress toward valued goals (Greenberg, 2002). Vroom s expectancy theory deals with the value and the relationship of rewards and required performance. This theory states that individual motivation comes from how people value the outcome. If employees do not receive promotions or pay increases, they may lack the motivation to perform. The employees will evaluate the work and the reward, and will choose an outcome based on how they value the reward. The equity theory emphasizes that both the absolute and relative rewards available in the system motivate employees. When employees think the system is fair, it highly motivates them versus when they experience unfairness; it demotivates them. Skinner s work explains respondent and operant conditioning, including positive reinforcement, negative reinforcement, punishment, and extinction (as cited in Foxall & Greenley, 2000). Basically, 8

9 the theory holds that employees learn most motivated behaviors. 8

10 Employees want a career path, public praise, opportunities for input, and constructive criticism. Performance appraisals must include individual and departmental goals that align with strategic goals. Other performance goals may consist of individualized employee development programs, involvement in highly profiled projects, and shared decision making. Businesses rely on technologies to communicate with employees and ensure operational autonomy. Employee engagement, commitment, and job satisfaction create a productive workforce (Markos & Sridey, 2010). Research shows a relationship exists between employee engagement, employee retention, customer satisfaction, and profitability. A review of successful organizations will confirm that companies use total reward systems to achieve competitive advantage and significant profits. Once an organization communicates a shared vision, employees can get on board with sales growth, market share, performance goals, and reward systems. People recognize companies like Zappos, Facebook, Google, and Adobe for how they value their human capital and employees by providing total rewards such as compensation, benefits, extensive training, mentoring, bonuses, and stock options. Nonmonetary motivators are also used such as praise, positive reinforcements, projects, and shared responsibilities and leadership opportunities. 9

11 The next few slides consist of self check questions for you to test your knowledge regarding the content covered in this unit. The correct answer will be indicated on the next slide. True or False: The path goal theory emphasizes that both the absolute and relative rewards available in the system motivate employees. 10

12 The answer is False! The equity theory emphasizes that both the absolute and relative rewards available in the system motivate employees. When employees think the system is fair, it highly motivates them versus when they experience unfairness, it demotivates them. 11

13 True or False: Intrinsic rewards include one s work and satisfaction with one s performance, which results in a self motivated ability to influence autonomy and respectability. 12

14 True! Extrinsic rewards include promotions, power and prestige, monetary benefits, opportunities to attend conferences and empowerment seminars, and opportunities to collaborate with senior organizational members (Bridges, 2006). Intrinsic rewards include one s work and satisfaction with one s performance, which results in a self motivated ability to influence autonomy and respectability. 13

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