Job satisfaction comes in different forms and affects
employees in different ways. Rewards, whether internal or external, play a key
role in an employee's job satisfaction. Though internal rewards well up from
within the employee himself based on his own actions, external rewards are
generated from another source and impact employees in various ways. Motivational
dynamics have changed dramatically to reflect new work requirements and changed
worker expectations. One of the biggest changes has been the rise in importance
of psychic, or intrinsic rewards, and the decline of material or extrinsic
rewards.
In the past 30 years many things have changed. Automation
and off-shoring have eliminated most of the highly repetitive jobs, while
global competition has produced flatter, more responsive organizations that
require employees to use judgment and initiative to a much greater extent. Over
this same 30-year period, the proportion of workers who say that their work is
meaningful, allows them discretion, and makes use of their abilities has more
than doubled—from less than one third to about two thirds. In addition, younger
workers now come to organizations with different expectations than their
parents. Raised during an era of rapid technological change and instant access
to data, they respond best to work that is more meaningful, allows them to
learn cutting-edge skills, and lets them find their own ways of accomplishing
tasks.
Most of the motivational models used today were developed in
earlier eras, when work and workers were different. However, these models do
not reflect the changes in today’s work dynamics. However, intrinsic rewards
have become more important and more prevalent in the workplace today.
Extrinsic
Rewards
Extrinsic rewards—usually financial—are the tangible rewards
given employees by managers, such as pay raises, bonuses, and benefits. They
are called “extrinsic” because they are external to the work itself and other
people control their size and whether or not they are granted. In contrast,
intrinsic rewards are psychological rewards that employees get from doing
meaningful work and performing it well.
Extrinsic rewards played a dominant role in earlier eras,
when work was generally more routine and bureaucratic, and when complying with
rules and procedures was paramount. This work offered workers few intrinsic
rewards, so that extrinsic rewards were often the only motivational tools
available to organizations.
Extrinsic rewards remain significant for workers, of course.
Pay is an important consideration for most workers in accepting a job, and
unfair pay can be a strong de-motivator.
Monetary
Monetary rewards are external and are given to an employee
by a representative of the company. Whether it's a paycheck, a bonus, accrued
vacation days, a gift card or anything else with a cash value, it is considered
monetary. In addition, compensation packages are also considered external
monetary rewards. Companies that offer child care, flexible spending accounts, and
health insurance and wellness programs provide external rewards to employees.
External monetary rewards are tangible and can be assessed a value by the
employee.
Non-monetary Rewards
Non-monetary external rewards are equally important factors in employee job satisfaction. The advantages of job security, flexible working hours and opportunities for advancement are extremely valuable to employees. Additionally, simple non-monetary rewards can impact an employee's morale and confidence. Praise from a supervisor, receipt of an employee-of-the-month award or the hanging of a blue ribbon on a work desk all instill a sense of pride and accomplishment. The simple act of a manager thanking an employee while shaking his hand can reap monumental benefits on the work front. An employee who feels a sense of accomplishment carries it to his next assignment.
Intrinsic Rewards
Intrinsic rewards are ones that come from within the employee.
For example, an employee might decide to take on a task outside of his normal
duties. It might be because he simply sees a need and wants to help the
company, he might want a new job skill or he might want to show management that
he is capable of increased responsibility. The benefit to this type of internal
reward is that it originates within the employee; he has a great deal of
personal satisfaction when he accomplishes the task. The downside to intrinsic
rewards are that the employee might take on a new challenge to prove himself,
but feel taken advantage of if he must continue the extra duties without
recognition. If the employee is not promoted, given a raise or a bonus, he
might decide to take his new skills to another company where he is recognized
for the skills.
The following are descriptions of the four intrinsic rewards
and how workers view them:
Sense of
meaningfulness: This reward involves the meaningfulness or
importance of the purpose you are trying to fulfill. You feel that you have an
opportunity to accomplish something of real value—something that matters in the
larger scheme of things. You feel that you are on a path that is worth your
time and energy, giving you a strong sense of purpose or direction.
Sense of
choice: You feel free to choose how to accomplish your work—to use
your best judgment to select those work activities that make the most sense to
you and to perform them in ways that seem appropriate. You feel ownership of
your work, believe in the approach you are taking, and feel responsible for
making it work.
Sense of
competence: You feel that you are handling your work activities well—that
your performance of these activities meets or exceeds your personal standards,
and that you are doing good, high-quality work. You feel a sense of
satisfaction, pride, or even artistry in how well you handle these activities.
Sense of
progress: You are encouraged that your efforts are really
accomplishing something. You feel that your work is on track and moving in the
right direction. You see convincing signs that things are working out, giving
you confidence in the choices you have made and confidence in the future.
Basically, most of today’s workers are asked to self-manage
to a significant degree—to use their intelligence and experience to direct
their work activities to accomplish important organizational purposes. This is
how today’s employees add value—innovating, problem solving and improvising to
meet the conditions they encounter to meet customers’ needs.
In turn,the self-management process involves
four key steps:
- Committing to a meaningful purpose
- Choosing the best way of fulfilling that purpose
- Making sure that one is performing work activities competently, and
- Making sure that one is making progress to achieving the purpose.
Each of these steps requires workers to make a
judgment—about the meaningfulness of their purpose, the degree of choice they
have for doing things the right way, the competence of their performance, and
the actual progress being made toward fulfilling the purpose.
These four
judgments are the key factors in workers’ assessments of the value and
effectiveness of their efforts—and the contribution they are making.
When positive, each of these judgments is accompanied by a
positive emotional charge. These positive charges are the intrinsic rewards
that employees get from work, ranging in size from quiet satisfaction to an
exuberant “Yes!” They are the reinforcements that keep employees actively
self-managing and engaged in their work.
External Versus Internal
External rewards are given to employees from the company,
bosses or even co-workers. But employees experience internal rewards, as well,
though they come from within. The satisfaction of knowing he has completed a
project, achieved a goal or simply applied his best effort to his work is
internal rewards that contribute to job satisfaction. External rewards enhance
an employee's internal rewards as they validate his own assessment of his self-worth.
For example, an employee who prides himself on achieving a goal experiences
validation when given a bonus check for his efforts.
Suggestions
Bestowing external rewards on employees typically garner
appreciation. It is prudent to examine the financial ramifications of an
external reward before doling it out. Tax consequences on a monetary reward can
dilute the value if not measured beforehand. External rewards can be given to
individual employees or to teams. Based on the work environment, give careful
consideration to the potential impacts of individual versus team awards.
Insulting one team member by rewarding another team member can do more harm
than good.