REWARD AND PUNISHMENT SYSTEMS
Oct. 4, 1996
A useful equation to bear in mind is:
Schneider and Bowen (Winning the Service Game. HBS Press, 1995)
say that there are four ways organizations fail to use reward effectively.
PERFORMANCE = MOTIVATION X ABILITY
- They fail to use the full range of available
Incidentally, pay fails the test of an effective reward.
- They fail to use the intrinsic reward of goal accomplishment.
If a customer leaves with a big smile, it can be highly rewarding to the
- They fail to use reward systems to facilitate service quality.
The reward system may inhibit rather than facilitate. Remember "the folly
of rewarding A while hoping for B." People do the things that are more
likely to lead to rewards or less likely to lead to punishment. Behavior
that yields rewards will persist. Behavior that fails to yield results
will be extinguished.
- They fail to manage reward systems effectively.
rewards or uneven or inequitable.
Definition of Motivation
To be motivated means to be:
People are energized by needs: security, esteem, justice.
People are directed by pursuing goals that yield reward that
People persist in behaviors that regularly yield rewards that
TYPES OF REWARDS
Money can gratify security needs. It can gratify esteem needs (if you
earn more than someone else in your peer grup). It can gratify justice
needs (if those who work hardest and do the best work earn the most).
These are big ifs and often the conditions are not met. Further, money
may not be an available tool for the manager at the time it is needed.
Seven tests of an effective reward are as follows:
One needs to be able to give the reward when
a large enough amount to be meaningful.
One needs to be able to give it when the manager
to, to whom, and how.
One should be able to undo the reward if it
clear that a mistake has been made.
- Performance Contingency
The reward should be connected to
you hope to get more of (i.e., performance).
The reward should be visible and understandable.
It should be given immediately after the behavior
frequency one wants to encourage.
There should be evidence of the reward for a long
after it has been given.
REWARDS OTHER THAN PAY
Jobs as a Source of Reward
Jobs need to possess five characteristics to be effective sources of
rewards for employees.
- SKILL VARIETY
Different activities and different talents needed
in carrying out tasks.
- TASK IDENTITY
Completion of a whole identifiable piece of work
with a visible outcome.
- TASK SIGNIFICANCE
Task should have a substantial impact on the
lives of others in the organization or in society.
Considerable freedom and discretion in scheduling work and
in determining how it will be carried out.
- JOB FEEDBACK
Performing the job itself should be a source of direct
and clear information about how well the work has been done.
Recognition and Feedback as Rewards
Goals as Rewards