Reward Systems in Organizations

This text examines the aspects of reward systems in organizations, such as the bases of reward distribution, intrinsic vs. extrinsic rewards, the relationship between money and motivation, and pay secrecy.

Introduction

  • How do organizations choose the best appraisal system for their organization?

After a company has designed and implemented a systematic performance appraisal system and provided adequate feedback to employees, the next step is to consider how to tie available corporate rewards to the outcomes of the appraisal. Behavioral research consistently demonstrates that performance levels are highest when rewards are contingent upon performance. Thus, in this section, we will examine five aspects of reward systems in organizations: (1) functions served by reward systems, (2) bases for reward distribution, (3) intrinsic versus extrinsic rewards, (4) the relationship between money and motivation and, finally, (5) pay secrecy.


Source: OpenStax, https://openstax.org/books/organizational-behavior/pages/8-4-reward-systems-in-organizations
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