As markets become more competitive on a global scale it is increasingly crucial to maximize the performance of the workforce to maintain the market position (Winfield, Bishop, & Porter, 2004). Research has proven that when human being are appreciated and praised they tend to improve their performance. This is another way an organization can apply as a reward so as to improve
performance. When managers take time to meet and recognize employees who have performed well, it plays a big role in enhancing employees’ performance (Torrington and Hall, 2006). Rewards those are associated with the job itself, such as the opportunity to perform meaningful work, complete cycles of work, see finished products, experience variety, receive professional development training, enjoy good relations with coworkers and supervisors and receive feedback on work results (Gilley, Gilley, Quatro, & Dixon, 2009). Individuals are best motivated when they believe that the behavior will lead to certain outcomes that are attractive and that performance at a desired level is possible. Rewards can be used to improve performance by setting targets in relation to the work given e.g. surpassing some sales targets. Organizations should reward employees more often. This greatly improves performance compared to having the rewards maybe only once a year. This is because frequent rewards are easily linked to the performance (Njanja, Maina, Kibet, & Njagi, 2013). 2.9 Theories of Reward System 2.9.1 Vroom’s Expectancy Theory Vroom suggested that individuals will choose behaviors they believe will result in the achievement of specific outcomes they value. In deciding how much effort to put into work behavior, individual are likely to consider three things; valence, instrumentality and expectancy. All these factors are often referred to as ‘VIE’ and they are considered to influence motivation in a combined manner. Managers should therefore attempt to ensure their employees that increased effort will lead to higher performance which will hence lead to valued rewards (Njanja, Maina, Kibet, & Njagi, 2013). Vroom’s (1964) expectancy theory is helpful in emphasizing the complexity of individual thought processes which may or may not lead to action. It is suggested that assessments,
firstly of whether effort is likely to result in achievement of a specific task and whether success in the task will lead to the individual’s desired personal reward precede any possible action. It is this calculative thought process and the fact that the individual’s desired reward may not be money that emphasizes the complex nature of an effective reward system (Collings & Wood, 2009). Expectancy theory (Vroom, 1964 and Porter and Lawler, 1968), which states that motivation, will be high when people know what they have to do to get a reward, expect that they will be able to get the reward and expect that the reward will be worthwhile.
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