Why Most Reward Systems Fail and What to Do About It

greatest incentive for employee performance is affording one another the simple pleasures in life: warmth, care, thoughtfulness, appreciation and kindness.

Organizations should practice open communication when distributing extrinsic rewards, (e.g., promotion), so employees can compare the value of everyone’s contributions.

include flexible working hours and work from home

Workers have varying self-worth and needs for extrinsic and intrinsic rewards.

based on individual and team success.

skill-based pay to reward those who acquire additional expertise and to develop a multiskilled work force

Employees’ self-worth is based on both internal criteria (e.g., personal identity and self-confidence) and external criteria (e.g., college degrees, job titles and financial net worth).

should capture the value of their short-term results and long-term contributions.

a range of extrinsic and intrinsic rewards to satisfy their employees’ unique motivations. In most cases, a cafeteria-style benefit package

Most employees want to take ownership in their contributions to the company, rather than “rent” themselves to the organization.