Managing expectations
It is necessary to manage expectations. No reward offered
through an incentive, bonus or performance-related pay scheme
will be effective as a motivator unless individuals believe it is
worthwhile and can reasonably expect to obtain it through their
own efforts. Similarly, people are more likely to be motivated if
they know that their achievements will be recognized.
The implications of these approaches as they affect financial
and non-financial reward policies and practices are set out
below.
FINANCIAL REWARDS
Financial rewards need to be considered from three points of
view:
■ The effectiveness of money as a motivator.
■ The reasons why people are satisfied or dissatisfied with
their rewards.
■ The criteria which should be used when developing a finan-
cial reward system.
Money and motivation
Money is important to people because it is instrumental in satis-
fying a number of their most pressing needs. It is significant not
only because of what they can buy with it but also as a highly
tangible method of recognizing their worth, thus improving their
self-esteem and gaining the esteem of others.
Pay is the key to attracting people to join an organization,
although job interest, career opportunities and the reputation of
the organization will also be factors. Satisfaction with pay among
existing employees is mainly related to feelings about equity and
fairness. External and internal comparisons will form the basis of
these feelings, which will influence their desire to stay with the
organization.
Pay can motivate. As a tangible means of recognizing achieve-
ment, pay can reinforce desirable behaviour. Pay can also deliver
messages on what the organization believes to be important. But
226 How to be an Even Better Manager