To the extent that employee needs and goals are met by the company, we would expect commitment to increase. This exchange process is shown in Exhibit 8.6.

9 That is, employees develop ties with organizations when they perceive that the organization is interested in their welfare and willing to protect their interests. It has been found that reward systems in no small way influence employee commitment to the organization, primarily through the exchange process.

Employee commitment to the organization.

This was discussed in the previous chapter. Reward systems have also been shown to influence an employee’s decision to come to work or to remain with the organization. Hence, reward systems serve a very basic motivational function. Following expectancy theory, employees’ effort and performance would be expected to increase when they felt that rewards were contingent upon good performance. It is generally agreed that reward systems influence the following: Reward systems in organizations are used for a variety of reasons. Thus, in this section, we will examine five aspects of reward systems in organizations: (1) functions served by reward systems, (2) bases for reward distribution, (3) intrinsic versus extrinsic rewards, (4) the relationship between money and motivation and, finally, (5) pay secrecy. Behavioral research consistently demonstrates that performance levels are highest when rewards are contingent upon performance.

How do organizations choose the best appraisal system for their organization?Īfter a company has designed and implemented a systematic performance appraisal system and provided adequate feedback to employees, the next step is to consider how to tie available corporate rewards to the outcomes of the appraisal.

Promis system cases