Why Most Reward Systems Fail and What to Do About It

consistent and transparent reward system

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

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

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

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

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

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

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

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