Compensation & Benefits Review · 2017 · 69 citations · 0 references
ManagementHuman Resource ManagementOrganizational BehaviorEmployee EngagementReward SystemsTalent ManagementEmployee MotivationMonetary IncentivesMotivationNon-monetary RewardsPerformance-based RewardsReward StrategyCash RewardsEmployee RewardsMotivational DriversMotivational Effects Of RewardsNoncash RewardsNonfinancial RewardsReward AlignmentReward Systems Design
Many organizations struggle to hire and retain talent in today’s tight labor market, making effective employee rewards essential. The authors review evidence on workplace rewards and recognition and call for further research on when and for whom cash and noncash rewards enhance intrinsic motivation, commitment, and performance. They conduct a literature review of evidence explaining the importance of workplace rewards and recognition. The review concludes that organizations should move beyond salary and traditional cash rewards toward nonpecuniary, tangible, and intangible rewards and recognition, and that aligning rewards with universal psychological needs is crucial.
Given the struggle that many organizations face hiring and retaining talent in today’s tight labor market, it is critical to understand how to effectively reward employees. To address this question, we review relevant evidence that explains the importance of workplace rewards and recognition. Based on a review and synthesis of the current literature, we make the case that organizations should move beyond salary and traditional cash rewards to place greater emphasis on nonpecuniary, tangible and intangible rewards and recognition initiatives. We further highlight the importance of aligning rewards with universal psychological needs. Finally, we discuss the need to conduct more research to understand when and for whom cash and noncash rewards increase intrinsic motivation, organizational commitment and optimal functioning in order to improve the design and implementation of existing reward programs.