Last Updated 11 May 2020

Reward Systems for Management Performance

Category Motivation
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            Management of performance management is the strategic function of the managers and executives in the organization to reinforce the inherent leadership traits of the employees for production and efficiency of the whole workforce. Reward systems serve as reinforcement and for the employees to challenge their working capacities and for them to exert their quality performance. There are several strategic reward systems that aim to empower talent retention and loyalty to the company, improve performance, and increase productivity. Reward systems A-competitive salary without performance bonus, B—base salary with a huge bonus, and C—base salary with competitive-based performance bonus are discussed and evaluated to assess their strengths and weakness and to find the best solutions for efficiency.

Reward Systems for Management Performance


            In every organization or company, management performance is important for ensuring productivity and success for the company’s goals and objectives. Therefore, in order to execute effective performance management, companies think of possible strategies and techniques to improve, enhance, and empower the workforce. This paper then, shall focus and discuss on the strategic reward systems provided for employees to maintain their job motivation and satisfaction.

Management Performance

Management performance refers to the supervision and leadership among the employees to reinforce them in exerting their best in their job tasks and responsibilities. This management performance includes the provision of reward systems or the reward-reinforcement orientation (in Industrial/Organizational psychology) to the workforce of a certain competitive company. It also addresses the concerns of the employees in the company (Heathfield, 2008). Moreover, an efficient management performance increases the likelihood of “group think” or cohesiveness, and even inspiration and motivation in the working environment for it gives importance to the needs of the employees so they can carry out their jobs well.

Reward systems and Performance Management on Empowering the Leaders

There are huge challenges to develop and improve reward systems for executives & managers for performance. The management for some companies even makes use of their compensation packages to motivate the existing employees in exerting their better and quality performance in their designated job tasks. Moreover, salary package may also serve as an invitation to persuade prospect candidates in applying in their company. In addition, reward systems are mostly provided with the following variations: competitive salary with no performance bonus, base salary with a huge bonus based on performance, and base salary with bonus based on competitive performance—depending on the overall goal of the company.
It is imperative therefore for managers and executives to invest time, money, and effort through implementing any of the reward systems so that the employees could feel that they are being paid and compensated for their work and service. Further, if the working place is created in such a way that is free from stress, and disturbances, it definitely means that there is a strong management of performance implemented. A company with strong management performance puts every employees needs into consideration to meet their pleasing and desired working conditions (Heathfield, 2008).

The Reward systems on the other hand, promote the company in a way that it gets congruent with the individual goals of the employees. Not only do reward systems get in line with the personal goals of the employees, but it also contributes into meeting the target and overall objective of the organization. Providing a sound and adequate reward systems truly reinforce the positive response of the employees which is mostly motivation and satisfaction. Employees react in a predictive way of attaining desired results for their career growth and development and also, to get close to hitting and meet the strategic plan and target production as expected by the management (CLS, 2005).

Evaluation of some Possible Reward Systems for Employees

            Some of the possible reward systems provided by the management to increase the exertion of quality performance for the workforce are as follows: a) competitive salary with no performance bonus; b) base salary with a huge bonus based on performance; and c. base salary with bonus based on competitive performance.

First of all, the provision of a reward system A which is the competitive salary with no performance bonus has to be evaluated. At best, this may result in the overwhelming reaction of an old or new hired employee for the price offered may be large. However, the new or old employee may react discontented with the idea that the consequence of the large pay would mean no extra payment for their good performance in executing their jobs. At worst, the outcome of this kind of reward system for existing employees may lead to further discontentment and expectation of raise in pay or salary most of the time and in the long run.

Second, the next reward system that is to be evaluated is Reward system B or the base salary with a huge bonus based on performance. The strength of this kind of reward provision is viewed to be very impressive among existing old and new employees, and also even to those who are interested to apply in a particular company because it gives them the impression that their compensation have the unlimited tendency to exceed their expected rates of bonus. This reward system gives the employees or interested applicants the idea that they have the power to manipulate their incentive capacity quality performance in order to gain huge sums of bonuses for their outstanding performance. However, the weakness of this type of reward system could be the dependence of the employees in the reward reinforcement before having the initiative to work using their intrinsic motivation and commitment to their jobs. The negative outcome of the dependence in reinforcement is the loss of initiative in devoting and committing in work to contribute to the organizational path of the company. This reward system therefore, does not assure that the employees perform their best for their inherent wish to work as a team and serve to meet the goals of the company; plus, it may just lead to the tendency of vaingloriously acting independently as an individual working in a company but not as a team member of the organization. Thus, reward system B neither predicts talent retention nor loyalty to the company.

Last but not the least, reward system C or base salary with bonus based on competitive performance is viewed as the best reward reinforcement strategy that appears very reasonable and at the same time, very rewarding. For the fact that the company provides a base salary, it is a good strategy to promote the trustworthiness of the company that they value their employees in a way that the management has foreseen the need for providing the base pay for the transportation allowance for sustenance of the employees. Moreover, the provision of the merit pay or is reasonable for both the company and the employee. Not only does it show the employees that they can save earnings in addition to their base pay but also, they can always increase their productivity and efficiency in order to meet their desired and expected bonus pay. However, at worst, reward system C may lead to the complacency of the employee for the mere fact that they are sure that they would have a basic salary even if they do not exert that much effort to gain incentives. In so doing, a balance for the provision of this kind of reward should have accompanying set of rules and policies in the company for equality among the employee-employer relationship.


            Performance management is the strategic function of the leaders in the organization to empower the leadership traits of the employees for production and efficiency in the workforce. Reward systems then, serve as reinforcement for the employees to challenge their working capacities and for them to exert their quality performance. Reward systems C or the provision of a base salary with competitiveness-based performance bonus is the best strategic method for reinforcing productivity as compared to reward systems A: competitive salary with no performance bonus and reward systems B: base salary with a huge bonus based on performance (CLS, 2005).


Caliber Leadership Systems. (2005). Performance management. Retrieved December 11, 2008,


Heathfield, S. M. (2008). “Performance Management Resources.” Performance Management:

            You Get What You Request and Reward. Retrieved December 11, 2008, from,



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