Pay and Incentives are part of a reward system formulated by HR in consent with their management. These motivational instruments are offered to employees or groups not for their merit, but for their performance. Ed Lawler (1994) was among the first to champion the concept of reward for performance, integrating company strategy, pay systems and employee behaviours for higher productivity. Therefore, I beg to differ with my colleague on his point. Also, I don’t think “any given contribution to workplace performance” should merit the organization to increase pay or offer incentives to employees. Like I said earlier, pay and incentives are rewards offered by the management in recognition of a person or group’s outstanding performance, and not just any given contribution. “The reward system is an important means of communicating and reinforcing organisational business goals, not just because it represented an important factor in regulating important organisational policies, but because reward systems can persuade or motivate employees to achieve higher goals” (Brown, 2001, p.1-2).
As my colleague rightly pointed out, psychological contract mandates that employees and employers work together in an atmosphere of mutual respect and kind. The contract clearly defines the roles of the employer and employee, and how they need to manage those roles. However, I was confused by what he meant by, “In this manner, employees will be treated fairly in all regards, including that of going above and beyond the scope of work duties in order to receive fair merit and promotions based on performance.” He rightly pointed out that, yes; pay-for-performance should be on merit, and include all data that established an employee’s personal contribution to the organization. Finally, on the question of why employers have implemented policies that offered employees a healthier lifestyle, he said that employers felt that it would cut medical costs to the organization, enhance efficiency and performance, and wellness of the employee.
Reference
Brown, D, (2001), Reward Strategies from intent to impact, Chapter 1, Reward strategies: essential or ineffectual? CIPD, p.1-2
Lawler E. E, (1994), Effective reward systems: strategy, diagnosis and design, in Holland A (Ed.), Diagnosis for Organizational Change: Methods and Models, New York, Guilford Press
