Reward Impacts on Job Satisfaction

Reward means giving or receiving something for a desirable effort or behavior. In this essay, impacts of external rewards will be discussed, such as privileges, money and other incentive. Using reward policy could be beneficial to organizations as well as employees. As a matter of fact there are a lot of evidence that have been provided by researchers, which show the direct relation between reward, performance and job satisfaction. In contrast, punishment is found necessary to apply in order to balance the strategy. This essay will compare the use of reward and punishment as well as ageing how incentive is to apply reward strategy within the organization. The essay is divided into two parts: first it will show the impact of reward on the employee’s job satisfaction as well as performance. Secondly, how reward will fortify the sense of competition and productivity among the employees. Ultimately, the essay concludes that the reward has positive effect on the employee’s performance within an organization. Every organization’s success is so dependent on its staff performance and therefore, keeping those employees motivated should be in the organization priority’s list. Much research has been conducted to explore the relationship between reward and performance. kilman(1989) found positive relation is so perceivable between reward and performance, however it was more specific in management . † More specifically, the reward system should be aligned to motivate employee performance that is consistent with the firm's strategy†, (Galbraith, 1973 Journal of Organizational Change Management, Vol. 4 No. 2, 2001, p. 114). Lazear (2000) shows significant positive effects of incentive pay on productivity (in the range of a 44-percent gain) in his unique dataset of a firm. These finding are all practical, reliable and applicable for organizations, hence employee’s level of performance can be increased by applying contingent reward in the organization’s strategy. Performance by employees is crucial to organization, so as employee job satisfaction, which is one of the incentive that helps to increase the employees to performance as well as encouraging them to focus more on their job. Like performance, employee’s job satisfaction can be increased by applying rewards. (Ritz,scott and cherrington, 1971). The reward can not increase the performance all the time but it always will increase the job satisfaction, therefore, based on the researches we could assume that the reward will fortify the employee’s satisfaction and since it benefits the organization by making its employee more committed and focus on their job, ultimately the organization’s yield will increase.