THE process of linking up performance with rewards starts from the childhood. “Do this and you will get that” is the most repeated phrase in our memories. However,it is just the beginning. In our academic life, it takes the form of grades while in our professional life, we are tempted by promotions and increments. These rewards in job life, are divided into two: intrinsic rewards and extrinsic rewards.
Intrinsic rewards are those that the individual rewards himself, like feelings of accomplishment. Extrinsic rewards are those that are provided to the individuals by someone else (bonus and other perks).
Companies all over the world, and Pakistan in particular, heavily rely on extrinsic rewards (mostly monetary increments) to improve productivity. Very little attention, study, or even acknowledgment is given to intrinsic rewards as tools of motivation. The question is, do rewards work? There are three contentions to the argument.
a) By and large, rewards especially financial rewards, succeed at securing only one thing, and that is temporary compliance. As long as the rewards are there, people might perform. Once the rewards run out, people revert to their old behaviour.
Studies show that offering incentives for loosing weight, quitting smoking, using seat belts, are worse than offering nothing at all. They don’t alter the attitudes that underlie our behaviour. Research has shown that there is a very slight, and on many occasions “negative correlation” between pay and performance.
Experiments also suggest that people who are trying to gain a prize will do less imaginative and less flexible work, than those of equal talent, who do not have that pressure on them.
Those who are classified as winners for e.g. the Noble laureates suffer from a deterioration of standards after winning, perhaps, because they feel there is nothing else left to accomplish any more.
That is why, intrinsic rewards are very important, because they lead towards long term motivation.
Rewards and awards devalue any activity worth doing in its own right, and thus do not produce the enduring commitment to any action, they merely and temporarily check what we do.
Which brings us to our second contention.
b) Punishment and rewards are two sides of the same coin. By making your bonus contingent on certain behaviour, managers manipulate their subordinates, by withholding, withdrawing, or promising it in the next quarter. The affect is identical.
Human beings are born with a natural curiosity, and efforts should be made to excite it, nourish it, stimulate it, and not strangle it. Studies have proven that the less the child is punished, the more obedient it is, both in the presence of parents, and when it is on it’s own.
When organizations rely heavily on extrinsic rewards, they are in danger of:
* Destroying cooperation and organizational excellence by forcing people to compete with each other for rewards. When employees compete for a limited number of incentives they see this as the major obstacle to success.
* Not discovering the underlying root cause of non-productivity. Answering questions like; are employees prepared for the demand of their job, long term vs short-term impact etc.
* One causality of rewards is creativity. Focus shifts on numbers rather than new ideas.
* Stressing too much on what the employee can earn for good work and as a consequence lessening his interest in the work itself.
c) Rewards are like bribes in the workplace. They encourage workplace corruption. They are an insult to the employee and force him to carry favour with the boss and withhold information about poor performance.
However, one exceptional form of rewarding the individual in workplace is through ‘praise.
What is basically required is a positive, enthusiastic approach to changing problems into opportunities, and, more importantly, providing praise for ‘intelligent failures’.
To learn many tasks, it is necessary for the individual to find out where he is right and where he is wrong. This “Knowledge of Results” is provided by the environment without human intervention. Nobody receives lessons in how to play darts. Just throw them, observe and adjust further throws. Driving an unfamiliar car, one learns how safe it is to take corners by registering the curves and adjusting automatically.
Pupils will learn best when they interpret the teachers’ remarks, as helping to improve their performance, rather than simply grading them. Specific comments are more fruitful than general comments.
INCENTIVE PRACTICES IN PAKISTAN: The typical company in Pakistan does not believe in intrinsic rewards. They are also indifferent to management practices like organization, loyalty and individual development.
Most of the industries in Pakistan are complaining about the high turnover of the employees. The continues decline of the textile industry, especially in the international markets is attributed to it’s inability to deliver their products on time. Foreign buyers are very skeptical about vendors from Pakistan being able to fit in the JIT (Just in time) requirements of the highly competitive global market. One of the major reasons given by the textile industry is that it is due to the lax attitude of their employees. Employees have no affiliation with the organization and keep on hoping from one firm to the other, in search of a better environment. Such abrupt departures of key employees disrupt the production flows and add to the cost of rehiring and retaining the new entrants.
As the saying goes “employees turnover is correlated to customer turnover”. Thus as employees leave the company, the customer service becomes erratic and uncertain, resulting in customer defection. So why do organizations avoid intrinsic rewards? Perhaps because they feel that more reliance on intrinsic rewards can be a tedious, difficult costly and long-term operation. But they must also realize that it is more sustainable, permanent and productive.
Such permanent productivity can be brought about by exercising the 3C’s.
* CHOICE: Employee participation in decision making to make him involved and willingly committed to the job.
* COLLABORATION: Encourage teamwork to facilitate exchange of ideas and interdependence.
* CONTENT: Help him to devise job content which suits his capabilities an skills, bringing about a compromise between his own job expectations and the organizational requirements.
Research shows that productivity and performance improve the most when work is reorganized in a way so that employees have the training opportunities and authority to participate effectively in decision making. Also when they have assurances that they will not be punished for expressing unpopular ideas. And last, but not least, will receive a fair share of gains.
They will not only exert physically, but put their minds and hearts into their work. This is the only way to break down the barriers between the boss and the officer, between the peers and the colleagues, and between the individual and the organization. This will eventually help in creating a mental, personal and passionate commitment to the workplace.
