Organization: Contemporary Principles and Practice, 2nd Edition

CHAPTER 7

Questions of Reward

WHAT THIS CHAPTER COVERS

The subject of reward policies and systems in organizations is so far reaching that two chapters are given over to it. Chapters 7 and 8 together present the main issues and choices concerned. They consider how reward and payment systems can be adapted to suit contemporary conditions and the adoption of new organizational forms. For rewards to contribute effectively to the process of organization, they need to reconcile the purposes of both management and employees. Chapter 7 reviews theories and concepts that have been developed to aid our understanding of rewards. Chapter 8 focuses on the specific issue of pay.

This chapter begins by discussing the role of reward policies and their systemic nature. It then distinguishes between extrinsic and intrinsic rewards, and continues by examining the criteria that management and employees respectively apply to rewards. Managerial criteria reflect the contingencies that a reward policy is intended to meet, such as attracting the desired kind of employees and motivating them to achieve the required performance of tasks. The criteria that employees apply to rewards are a guide to their motivational potential. We consider the psychological and sociological research that has informed such criteria. The chapter then discusses two perspectives that suggest how contingent factors and motivational aims can be linked together in an effective reward policy. These perspectives are expectancy theory ...