DO REWARDS MOTIVATE EMPLOYEES?
By Heera Singh
Source: http://www.heera. com.my
INTRODUCTION
The underlying philosophy behind most motivation schemes in Malaysian
organisations, is that employees must be offered rewards, in order to
motivate them to be more 'productive'. In fact most Malaysian organisations
have some form of incentive program built into their compensation and
benefits scheme.
But the question asked is, "Do incentives and rewards work?" Do incentives
make people more efficient and effective? Do incentives like paid holidays
motivate employees? My view is that it does, but only for short term
periods. It produces temporary compliance. Rewards do not create an enduring
commitment to work but temporarily, change our short term behaviour. It is
ineffective when it comes to producing lasting change in attitudes or
behaviours. As long as there is an incentive, the productivity will improve.
Take away the incentives, and the productivity also wanes. So the question
asked is, "why are organisations still offering incentives"?
REASONS WHY ORGANISATIONS OFFER REWARDS
My answer to this is that, most Malaysian organisations want short term,
easy solutions to problems. For example, if the sales department are given a
target of achieving an increase of sales by 30%, and are informed that they
would receive cash incentives if they manage to do so, then the chances are
that the sales personnel would be immediately motivated to accomplish that
goal. Assuming that this is achieved, then there would be a two fold effect
i.e. the employees get their cash incentive and the company gets a 30%
increase in sales. This seems like an excellent win-win solution? But what
happens then? In an indirect sense, the company has passed a clear message
that rewards are tied in with productivity. The message to employees is
clear; we pay you for "normal" performance, and if we want better
performance we will have to pay for it. The motivation is extrinsic and is
short term. After the rewards have been distributed, the personnel in the
sales department will get back to what is termed as 'normal' performance.
But why is this so? This behaviour can best be explained through behavioural
theories of learning as advocated by social scientists like Pavlov. The
incentives offered to employees for producing or achieving tangible
objectives, tends to condition staff into adopting the following attitude,
"when I achieve this, you will give me that". The motivating factor here is
the rewards. Take the rewards away, and employees have a convenient excuse
not to do 'productive work'. In that context its long term effects are
minimal and more importantly may sometimes work counter to desired
expectations. Rewards and incentives in the context of this article are
tangible items or things given to employees over and above their normal
salaries. These could range from holidays to cash bonuses.
DRAWBACKS OF REWARDS
To further illustrate this point of rewards having only short term
motivational value, let's take the example of bonuses. The problem here is
that it is taken for granted. Employees expect bonuses at the end of the
year, even though they may not have contributed to the company's
profitability. As it has come to be expected, it's motivational value is
therefore minimal. On the other hand, if the bonus, for whatever reason is
not paid, then there will be a backlash as employees not only become
de-motivated, but also angry, frustrated and disappointed. The value of the
bonus now becomes sustenance of motivation rather than motivation per say.
At the same time, there exists this very real threat of de-motivation if the
bonus is not given out or the amount given out is not up to expectations.
In a real life example which took place in America, a well known pizza chain
offered students free pizzas whenever they completed reading a book. These
coupons were given through teachers who served as the control process. On
the surface of it, this looked like a very good idea for encouraging
students to read and at the same time afford valuable publicity to the pizza
chain. Unfortunately the end result was contrary to expectations. It was
found that those students who had already acquired the habit of reading
started reading shorter and less challenging books so that they could get
more coupons. Those who had not started to read were encouraged to read only
short and simple books. Eventually when the scheme was stopped, so did the
reading, by those who used to be avid readers as well as those who were not
reading previously. What happened here was that the scheme substituted the
intrinsic motivation of reading for pleasure for the extrinsic motivation of
getting coupons. With pizza coupons no longer available, the children felt
that there was no longer a reason to read. This true incident demonstrates a
clear drawback of incentive programs.
Other than this, rewards have other disadvantages too. When employees are
aware that problems at the work place can jeopardise the receipt of rewards,
then they will be encouraged to pass problems on to other departments or
other individuals elsewhere and later in the system. The attitude will be to
ensure that no problems exist irrespective of whether it jeopardises
organisational objectives.
Staff will also circumvent the system for personal gain, creating problems
for the system. The attitude will be to do everything possible in order to
ensure that management perceives the department or sub-department as
'effective' or 'efficient' even if this had to be done at the expense of
customers. For example, in a real life incident, the mechanics in a car
servicing centre provided unnecessary repairs and replaced perfectly good
parts in order to meet their monthly quotas. Short term, the mechanics
gained, but long term this was obtained at the expense of customers and the
credibility and image of the company.
Rewards can also undermine teamwork and co-operation. They often set up a
form of internal competition in which people strive to be perceived as
better than their fellow employees. Competing employees will regard each
other as adversaries. Therefore instead of working together to achieve the
common goals of the organisation, they may instead try to subvert each
others' efforts, at the expense of organisational objectives. Complementary
to this situation is the fact that once rewards are dispensed, those not
receiving it do become de-motivated. They will raise questions as to the
fairness of the system, and the very idea of the system itself. So in a
sense, the rewards will motivate some employees in the short term, whilst at
the same time de-motivating others in the short and long term.
When rewards come into play, employees will also often opt for safer
options. They will be less inclined to take risks. Challenges are avoided
because the reward system encourages conformity and concern about the
rewards employees can get.
METHODS TO MOTIVATE EMPLOYEES AT THE WORKPLACE
So what can be done about all this? How do we motivate employees at the work
place? How do we dispense with rewards and incentives without de-motivating
employees? There are no clear cut answers to all these questions. I would
suggest that perhaps managers' time would be effectively spent doing some of
the following.
Firstly, as far as rewards are concerned, organisations must pay employees
well and fairly, and then do everything possible to help them forget about
money. There must be this perception by employees that they are being paid
fairly for the work that they are contributing to the company. A good
yardstick is what other companies in the industry are paying. If possible,
pay them a little more, so that this cannot be used as a convenient excuse
for being unproductive. Once the compensation and benefits system is taken
care of, then the company must take measures to improve the work
environment.
There must be a serious attempt to remove the factors that de-motivate in
the organisation. This can range from offensive individuals to ineffective
systems, to unfair rules and regulations. Ask employees what gets in the way
of them doing their job well; then remove those obstacles. Ask employees
what can be done to improve the work place; then provide those facilities.
Focus on constantly improving the work environment from job methods to the
provision of facilities like water coolers, pleasant rest areas etc. What is
important is for employees to be happy at their work place. There must be
this perception that management cares and is concerned about their welfare
and their needs.
In that context, 'happiness' in the work place cannot be achieved by
isolated events or incidents like company dinners or family days. A staff
feels happy when he knows that he is working for an organisation that cares.
And how does a company show that it cares? This is again difficult to answer
as it covers a whole gambit of activities and factors like the way
management runs the organisation to the nature of the organisational
culture. At the end of the day, it is something an employee 'feels' about
the organisation. He may rant and rave at certain policies or managerial
incompetence, but deep inside he 'knows' that the company is doing it for
its own good and the good of its employees. He knows that the company is
being fair. If the majority of employees have common feelings of this
nature, then it can be safely said that the employees in the company are
'happy'.
More times than not, what is more important to workers are such intangibles
as being appreciated for the work they've done, being kept informed about
things that affect them, and having sympathetic managers and supervisors who
take time to listen to them. None of these intangibles cost anything other
than the time and efforts of superiors who care. Research has time and time
again demonstrated that employees work harder when they are recognised for
their efforts.
Employees also thrive on praise, and the more they get, the harder they work
to get even more. They want to know that they are doing a good job and that
this is valued by the company. Managers should therefore look for, and
capitalise on opportunities to praise their employees as often as they can.
When done properly, it's a small investment which brings in huge dividends.
CONCLUSION
One of the biggest fallacies that managers and organisations in Malaysia
seem to have is that employees are withholding a certain amount of effort
that must be bribed from them by means of various incentives and rewards.
Most organisations unconsciously perpetuate this fallacy through their
"motivational programs". And by doing so, they create an organisational
culture where productivity can only be achieved through incentives, which
will be to the long-term detriment of that organisation.
Malaysian managers and organisations must break away from this convenient
but out-dated notion. Incentives motivate but only for short-term periods.
On the other hand, a harmonious, happy and caring working environment will
have better long-term motivational value. It is this that organisations must
strive to attain in the long term.
In the final analysis, if I am asked the question, "do rewards and
incentives motivate?", my answer would be, "Yes, they do; they motivate
people to strive for more rewards".
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Biodata of author:
Mr. Heera Singh is the Principal Consultant of HEERA Training and Management
Consultancy. He is a highly qualified trainer who holds a Masters in
Management and Organizational Learning from Lancaster University, UK and a
Masters in Human Resource Management and Training from Leicester University,
UK. He has over ten years of experience in training: conducting
leadership-oriented courses covering areas such as motivation, teambuilding,
managerial skills, and supervisory skills. Heera is a also prolific writer
and has contributed many management articles for the mainstream media such
as the New Strait Times, The Edge and other local Management Journals.
Please visit this web site: http://www.heera.
com.my
