Do rewards and bonuses enhance performance?
visual courtesy hr.tsu.edu

Do rewards and bonuses enhance performance?

I had an interesting exchange of views (with Shatha Al Maskiry on Twitter), on how rewards and bonuses do not enhance performance as passion does.

 

 

 

 

 

 

 

 

 

 

 

Performance bonuses and complimentary rewards are the usual part of any employee remuneration. Most organizations undertake this and Asian organizations are no different. 

 The business world has changed significantly. There is a lot of content out there that makes a very clear case for how archaic the industrial era management practices have become in today’s world where technology has empowered the individual. Organizations across industries are still struggling to reconcile and find an ideal balance between their culture, employee engagement, leadership and business processes in order to get a grip on how new methods can be effective.

The answer, to this balancing act, lies with the employees!

It’s the employees who create the organizational identity through their culture and alignment with the purpose of the business. It’s their behaviour which reflects the passion, personality and efficiency of an organization and develops relationships with the stakeholders. This results in creating sustainable transactions and leads to profit for an organization.

Yet, more often than not, we see organizations not having this focus, on employees, in its business planning. We do not take into account the impact of culture, business purpose and, most importantly the passion employees have (on their work). Instead there is a tendency to focus on the short-term target, as the primary goal, as part of a process. As a result, leadership, employee development, recognition and engagement are all cast by the side in the course of this process. Instead the process takes over and the employee is merely a facilitator and is viewed as a ‘cost’ not as ‘investment’.

Given the globalized knowledge economy landscape today organizations can no longer afford to ignore the impact employees, as people, have on businesses. Leadership, culture, employee engagement (read happiness) are now the key drivers in tangible value creation.

As a result of this shift the ways in which employee rewards are given needs to change too. Whilst financial rewards act as an incentive to a certain extent the positive effect of the same reduces over time as employees seek social recognition and appreciation.

Investing in effective recognition leads to enhancing employee engagement and results in higher profitability. Effective recognition here is one that fulfills an employees’ life-cycle requirement or in other words takes into account the financial and social recognition needs of the employee into account and provides the same through acknowledgement of effective work done for the organization.

Such changes in employee reward structure have to be part of a cultural change, for an organization. Cultural change that would require the organizations’ leadership to be more empathetic; to create more conversations, that provide employees an opportunity to voice and discuss ideas, need to be created.

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Joy Abdullah is a strategy and brand marketing professional with substantial experience in designing brand experience, leading and implementing a broad range of corporate growth and realignment initiatives, across industries in Asia.
He writes on leadership & culture, ethical brand marketing, strategic brand management, employee-brand relationship and sustainable business strategies. 
Click here for his articles.  Connect with Joy on:
1. Linked In 
2. Twitter @JoyAbdullah.

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Saad AL-Habsi (CPM, PMP)

"Product Management Leader | ICT Business Partnerships | Driving Innovation and Growth | Strategic B2B Solutions"

7y
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Saad AL-Habsi (CPM, PMP)

"Product Management Leader | ICT Business Partnerships | Driving Innovation and Growth | Strategic B2B Solutions"

7y

I can't disagree with you and correct a little thanks goes a long way especially if you thanked in front of peers. This makes a huge impact on performance and productivity.

Romeo Habhab , MSc

Research & Development Manager@Delass Natural Products

7y

yes

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Shatha Al Maskiry

Country MD | People Advisory & Organizational Change | Performance Improvement | SCM | ICV | ESG | SME Advisory | Youth Leadership Development

7y

Very well written... Must focus on employees, not sales targets but many orgs are fast zzzzz :) this will be the new competition ... Which leader listens more actively to their employees

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