Incentives improve organizational culture and employee retention rates. Companies, such as Sodexo that offer incentives are likely to report improved interpersonal relationships, a culture of kindness, collaboration, communication, and compassion ( Kryscynski, 2020 ). Employees will understand that the company values their services. In return, they will attempt to perform their tasks per the company’s principles. Reward systems also recognize the significance of cooperation and individual differences ( Kryscynski, 2020 ). They identify the unique strengths that employees possess and incorporate them into the business model to enhance performance. Besides, incentives enhance employee retention since they increase the workforce’s emotional attachment to the firm ( Kryscynski, 2020 ). Job embeddedness is one of the individual outcomes of incentives. It comprises the match between an employee and their job, interpersonal relationships, and sacrifices that employees make to stay at a firm. If a reward system acknowledges employees’ core values, they would be motivated to work hard and invest their time and resources in a company.
Firms that recognize and offer incentives at the national level are likely to stimulate competition among co-workers and colleagues. Each employee will want the top officials to recognize their efforts ( Luft, 2016) . As a result, employees will ensure that they offer exemplary services. The employees may perceive the recipients of the awards as role models. Such an acknowledgement raises the quality of performance since it requires the best results from employees. Some workers may work together to develop creative ideas to win the award. In the process, there will be improved innovation and creativity among employees ( Luft, 2016) . However, a national reward system can create stiff competition among workers which may impede overall productivity. Some employees may undermine their colleague’s work to win the award. If not well-handled, the competition may destroy interpersonal relationships. As a result, individual performance may be higher than group performance.
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References
Kryscynski, D. (2020). Firm-specific worker incentives, employee retention, and wage–tenure slopes. Organization Science . https://doi.org/10.1287/orsc.2020.1393
Luft, J. (2016). Cooperation and competition among employees: Experimental evidence on the role of management control systems. Management Accounting Research , 31 , 75-85.https://doi.org/10.1016/j.mar.2016.02.006
