Why Most Reward Systems Fail and What to Do About It

Employees like feeling appreciated. A smile and a “thank you” goes a long way.

Most workers are reasonable about what they expect to receive from their organization as long as they’re treated with respect and are given the opportunity to influence key decisions that may affect them.

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

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

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

Employees’ work life can satisfy external criteria for self-worth and can be an important forum for self-expression.

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).

consistent and transparent reward system

every autonomous unit in the organization, e.g., wholly owned subsidiaries, can design a performance-based reward system according