Organizational rewards: considering employee need in allocation

Abstract

Purpose – The purpose of this study is to investigate how employee need relates to rewards and employee perceptions of fairness within an organization in the USA using a pay-for-performance system. Design/methodology/approach – To evaluate the presence of a relationship between employee need and reward allocation in a pay-for-performance system, a questionnaire was administered to a sample of 292 employees from two departments at an academic medical center. Findings – The findings highlight the positive relationship between employee need and reward allocation that remains when controlling for employee performance evaluation ratings. Findings further show that employee communication with the manager about need explains this relationship. Research limitations/implications – The findings make two important contributions to research on reward allocation and performance management. First, the results show employee need is related to the allocation of rewards in organizational settings outside of collectivistic cultures or developing countries. Second, by demonstrating the role of employee communication with managers about need within the relationship between employee need and reward allocation, the paper provides a more detailed understanding of additional factors related to compensation decisions in a pay-for-performance system. Originality/value – Little research has explored the relationship between employee need and reward decisions at an individual level in organizational settings within individualistic cultures. The findings from this study address this gap by establishing the presence of this relationship in a pay-for-performance reward-based organization with service-based values. This finding is timely due to the current economic downturn experienced by organizations, and thereby the level of employee need observed in Western individualistic cultures.

Effects of employee benefits on affective and continuance commitment during times of crisis

“…However, subjective utility did not moderate the effects of the provision of all employee benefits. This goes against previous findings on the importance of employee needs for the outcomes of employee benefits (Day et al , 2014). Consequently, the usefulness of flexible (cafeteria) benefit plans that allow employees to choose employee benefits according to their preferences is not directly supported.…”

“…Despite the call for further study of the effects of employee perspectives toward rewards (Xavier, 2014), available evidence on the effect of rewards utility on positive employee outcomes is limited and mostly focuses on monetary rewards, not employee benefits (Dulebohn et al , 2009). Research on the perceived utility of employee benefits is surprisingly limited (for example Day et al , 2014 focused on employee needs), and evidence on the ways that employee benefits can be grouped according to their subjective utility is not conclusive. The importance of determining employees’ benefit preferences was stressed in early studies of employee benefits and it has been the basis for the introduction of cafeteria/flexible benefits that have recently become very popular in HRM practice of companies (Hillebrink et al , 2008; Vidal-Salazar et al , 2016).…”

The effect of employee happiness on performance of employees in public organization in United Arab Emirates

“…The effect of workload and lexible working hours are not signi icant. Findings of this study are in agreement with the indings of previous studies (Day et al, 2014;Njanja et al, 2013;Orpen, 1982;Sarwar & Abugre, 2013;Shahzadi et al, 2014;Sun & Bunchapattanasakda, 2019;Türk, 2008;Turk, 2010).…”

“…These rewards and recognition motivate the employees and improve their performance (Shahzadi, Javed, Pirzada, Nasreen, & Khanam, 2014). Previous studies found that promotion, rewards, and recognition has a signi icant effect on the EP (Day, Holladay, Johnson, & Barron, 2014;Njanja, Maina, Kibet, & Njagi, 2013;Orpen, 1982;Sarwar & Abugre, 2013). Accordingly, in this study, it is proposed that promotion, rewards, and recognition have a signi icant effect on EP.…”

Performance Based Pay Management as a Determinant of Procedural Justice

“…Implementation of performance based pay can be realized through the effective performance based pay management strategy. Performance based pay management is normally described as a procedure of allocating pay in a systematic method, based on employees' knowledge, skill, and/or performance (Newman et al, 2017;Osterloh, 2014;Webb et al, 2014). The management of performance based pay has two main components: communication, and participation (Aimi, Azman & Fatmawati, 2014;Azman & Mohd Ridwan, 2017b).…”