Human beings are more likely to respond positively to praise than to rebuke especially long-term and this is especially true in the work place. The importance of a functioning reward system for your employees cannot be overemphasized as it provides a way not only to get happier employees but to increase their productivity.
It is true that happier employees are generally more productive employees. However, having something to look forward to if you work harder than your peers or show more initiative than them is also a reason employees are likely to work towards being more productive.
Thus, having a working reward system would enable you use rewards as a means of increasing the productivity of your employees. The reward system is based on providing something of monetary value to employees with superior performance. It works by using monetary and or physical gain as incentive for increased productivity instead of psychological gain which is employed in the recognition system.
There are different reward programs used by different business organizations some of which include: variable pay, bonuses, profit sharing and stock options and they could be used for both individual employees and teams. Before choosing a particular reward program, here are some things to consider:
#1.The type of Business
The type of business organization you run determines what type of reward program would be favorable for you and for your workers. Some reward programs such as the profit sharing system would work best in a business organization where employees are required to make a sale. So before choosing what type of reward program to implement, it is important that you take into account what type of business you run.
Different reward systems promote different forms of productivity. For instance, bonus pay is mostly used when you are trying to promote multiple short term, increased productivity periods, while stock options are better used when you are trying to promote sustained long term, increased productivity. Before choosing a reward program, make sure you are certain about what your goals are.
It is unwise for any business organization mainly a small business to make decisions that would make use of resources without actually taking into account the resources available. Because the amount of resources needed to implement different reward programs differ, it is very important to make sure your choice can be comfortably supported by your available resources.
What you need to remember is that picking a reward program requires careful consideration of what type of business you run, what you want to achieve, and what resources you have.