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Re-think Performance rewarding

Motivation is a great tool which employers uses all over the world to get the best out of their employees. There are many who literally abuses this tool as well to get more from their employees and customers, like offering discounts, showing eye catching ads, offering cashbacks or giving rewards or bonus to perform. Motivation is like hunger, you eat food and you feel full but after sometime you again feel hungry, every day you need to eat food to satisfy your hunger pranks. So companies which always and only relies on motivation to get things done are always stressed out. The long term solution is offcourse inspiration which takes time and effort to make an impression on customers and employees but once created it is long lasting. Inspired employees will not jump ship when the going gets tough for the organization, motivated employees will do. So am I saying that motivation is bad and we should do away with, not really. Researches also say that when employees are not rewarded for their work and not paid well, even if they feel connected to an organization they will eventually leave with a heavy heart. Frankly speaking we do not need money to be spent on a research to know that without periodic motivation neither customer or employees will feel good. So all I am saying is we need to strike a balance between inspiring and motivating workforce where inspiration will dominate motivation.

Motivation Tactic- Rewards & Recognition

One of the very tried and tested motivation tactic used for employees is Rewards & Recognition. This has been a golden discovery of mankind to get the best out of people and so has been used by many kings and rulers from thousands of years, even at home parents use this to get the best out of their kids. Nowadays also organizations use this to their advantage.

If someone performs well in a task or overall in a year then we reward that person and recognize as well. It has worked well for so many years but we do see some changes in employee's behavior nowadays. Today's workforce who are primarily millennials tend to care less of performance rewards, they care and value the recognition part though. I mean they will show up for a townhall or a meeting for sure when they know that they will be felicitated In front of other people. They will feel great about that, they will accept the reward however they will not value that reward very often. Vast number of employees are found to be disengaged at work these days, I have even worked with employees who are not willing to give their effort to complete a task on time even though they know that there is a reward waiting at the end. Disengagement has many aspects and reasons, one of the reason is rewarding people the right way or rather not rewarding people the right way.

The Expectancy Theory

In 1964, Victor Vroom who was a business school professor from Yale School of Management came up with a theory known as The Expectancy Theory which unlike Maslow's Hierarchy of Need model, stressed upon the outcomes. The theory stated that,

The intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual.

Victor establishes 3 relationships which is vey relevant to our topic today. These are,

​Effort to Performance Relation ( Expectancy )

​The expectation that certain effort will lead to certain performance

Performance to Reward Relation ( Instrumentality )

The extent to which the employee believes that getting a good performance appraisal leads to organizational rewards.

​Reward to personal Goal Relation ( Valence )

It is all about the attractiveness or appeal of the potential reward to the individual.

Now if you think about the first 2 points in today's context, am sure none of you will have any issues admitting that effort leads to performance and performance leads to reward. So we have no issues understanding Expectancy and Instrumentality. Majority of employers scores well in these. The problem lies with valence.

People born between 1920 & 1940 used to value things like Gold watch during retirement or a medal or even a pat on their back my their bosses, much water has flown under the bridge till then. 3 Generations went by but employers expect their employees to value a certificate or medal or some bonus or a voucher. They fail to understand that with generations things you value and cherish might change. When I was started my career in service desk, I used to be so proud to hear a praise of myself from my manager. A certificate and medal for good performance ? wow, we used to be blown away. It used to motivate us like hell to perform even better. Then I saw the culture of vouchers, sometimes Rs100 or Rs 500 or Rs 1000, worked for sometime. In today's world rewards have not changed so fast as the priorities of people have changed. Managers these days get such reactions from employees which baffles them. One story I heard from one my ex colleague who is a manager of a service desk was when he told an employee to complete a task and the reward was a Rs 1000 voucher, the employee replied back to him offering him Rs1000 instead so that his manager does not bother him for that task. Let me tell you that many managers and leaders complaint about today's workforce being indifferent to these motivations. Valence is an expected and not the actual satisfaction that an employee expects to receive after achieving the goals.. Yesterday's employees maybe were expecting money or vouchers for their performance, does not mean today's workforce expects the same or values the same. The point of valence is very crucial here. What Victor found out is that many employees intentionally tend to not perform because they were not happy with the rewards. The Expectancy Theory has it's flaws and it's critics, I personally also do not see that it can be applied to all however the fact remains that managers of my generation have gone through similar experiences including me.

Rethink Reward Programs

It is time to rethink our reward strategy before it becomes too late, remember in a few years time we will have centennial workforces coming in. Start thinking what today's workforce values. Do they value a shopper stop voucher or an amazon gift card, do they value some minor incentive or a smart phone, do they value Rs 5000 voucher or couple of paid leaves, Do they value a certificate or some publicity by their employers in social media about their performance etc. Is your brain flashing with some ideas now. My job is done. All the best.

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Biswadeep Banerjee
Biswadeep Banerjee
Jan 17, 2022

Even before publishing this article I decided to test it out. So I did a linkedin poll and on the very first day of the poll the trends aligned with my article

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