Perceptional acceptance of rewards gives results

It is not mere rewards but the acceptance of rewards that gives results. Most often, an objectively formulated reward system may not be effective in motivating individuals even though it keeps reasonable level of fairness in distribution of outcomes. Why does this happen? This happens because ‘perception’ acts as the determinant factor of acceptance at the workplace. Whatever be the situation, perceptional evaluation and acceptance are the determinant factors that lead to either positive or negative behaviors. Many empirical researches have established perception as a reality at the workplace, which has high influence on employee behaviors.

Perception is subjective. It is the way in which something is regarded, understood, or interpreted and is a psychological process of observation and interpretation that is influenced by either objective or subjective backgrounds. A situation may be evaluated differently by different individuals because of the difference in perceptions; and due to this, an outcome may not satisfy individuals in a group due to the perceptional differences among group members. 

Perception plays a significant role in human resource management. And for effective human resource management, it is critical that HR managers must be aware about the perceptions and perceptional differences among the individuals, as well as those related to their service conditions and the organization as a whole. And effective communication between the managers and individuals is the only way to understand the perceptions and perceptional differences of individuals. To avoid miss understanding, this communication should be open and transparent. Trust worthy dealings from the side of the management has a high influence on employee perceptions.

Employees have their own perceptions regarding benefits or rewards that are offered to them for their skill, experience or performance. Benefits extended by the employer are usually compared to the set expectations and evaluations that individuals have. And all in all, satisfaction is the end result of perceptual acceptance of what the employer pays in return of the service they provided to the organization. Organizations thus need to formulate a reward system after acquiring a thorough awareness of employee’s perceptions and needs. A typical rewarding system should be one that is capable for satisfying the physical and psychological needs of individuals. Money alone cannot serve this purpose and thus the importance of intrinsic rewards such as recognition play significant roles in creating employee satisfaction.

In this era of information, transparency needs to be the prime concern of management processes because it invariably leads to high levels of trust among employees. Acceptance of rewards must be considered in this respect. The base of acceptance, in most cases, is some sort of comparison with standards of individual choice. And how employees view their total compensation can have an enormous impact on the success of a business. The gap between perception and practice in rewards causes a low acceptance of the rewarding system, while a perfect match in perception and practice in total rewards results in high performance of employees. If there is a gap, employees may not accept even an objectively fair compensation if it does not match with the perceptions of fairness of employees. 

The perception of reward fairness is strongly related to employee attitudes, behaviors and performance. Thus, the two factors contributing to the acceptance factor are the quality of the rewarding system and the perceptions of the employees about their outcomes with respect to their contribution towards the organization.

As the figure depicts, the quality of rewards is evaluated by the employees through their perception and in accordance with the quality content of rewards rather than its quantity content. Employees have their own yard stick to measure and compare their rewards with their own comparable standards.                                                          

Employees who feel satisfied show positive behaviors such as loyalty, engagement and commitment; while employees who are dissatisfied show decreased engagement, and reduced loyalty and commitment. And while the positive behaviors lead to high performance, the less positive attitude (sometimes negative) results in low performance. From the figure, it is clear that the perceptional acceptance acts as the determinant of employee performance. 

This fact makes it necessary for the management, in a low performance situation, to review the rewards system and to modify it to the extent where the employees accept that through their perceptional evaluation, for improving employee and organizational performance. 

On the other side, high performance also warrants a revision and updating of rewards so as to match them with the improved results of the organization, for reinforcing the positive attitudes for the future to ensure long term results. It is necessary for organizations to invest in employees as they are the most valuable capital asset of the organization. 

A typical rewarding system should be one that is capable for satisfying the physical and psychological needs of individuals

Employee performance in a given context and for a given employee is the result of employee’s ability, engagement and commitment. Engagement and commitment are employee behaviors that are derived from employee satisfaction. Whenever employees perceive that work conditions including wages and benefits are fairly fixed and take care of their needs, they feel satisfied with the situation. Thus, managers who are responsible for managing employees have to act in two ways to succeed. At first, they need to ensure the right share of business outcomes to the employees as the contributors for the result; and secondly, to convince employees that the share provided to them is the right one in that situation. This means influencing the perceptions of employees and simultaneously providing the benefits in the right manner.

Employee performance in a given context and for a given employee is the result of employee’s ability, engagement and commitment. Engagement and commitment are employee behaviors that are derived from employee satisfaction. Whenever employees perceive that work conditions including wages and benefits are fairly fixed and take care of their needs, they feel satisfied with the situation. Thus, managers who are responsible for managing employees have to act in two ways to succeed. At first, they need to ensure the right share of business outcomes to the employees as the contributors for the result; and secondly, to convince employees that the share provided to them is the right one in that situation. This means influencing the perceptions of employees and simultaneously providing the benefits in the right manner.