REWARD SYSTEM AND ITS IMPACT ON EMPLOYEE PERFORMANCE

Abstract

This research paper focuses on the effects of reward systems on employee performance in the modern work environment and how satisfaction with rewards can lead to higher performance and better job satisfaction. This research paper focuses on the effects of reward systems on employee performance in the modern work environment and how satisfaction with rewards can lead to higher performance and better job satisfaction.The present study examined the relationship between employee rewards and employee performance. Specifically, three hypotheses were tested. The first hypothesis stated that there is a significant relationship between extrinsic rewards and employee performance. The second hypothesis stated that there is a significant relationship between intrinsic rewards and employee performance. The third hypothesis stated that there is a significant relationship between both intrinsic and extrinsic rewards and employee performance. The results of the study provided strong support for all three hypotheses. The regression analysis showed that both extrinsic and intrinsic rewards had a significant positive impact on employee performance. Moreover, the results showed that the combined effect of both intrinsic and extrinsic rewards on employee performance was stronger than the effect of each reward type alone. Based on the findings of the study, it is recommended that organizations should provide a mix of intrinsic and extrinsic rewards to their employees to increase their motivation and job performance. Extrinsically motivated employees can be motivated by bonuses, promotions, and other tangible rewards, while intrinsically motivated employees can be motivated by job satisfaction, recognition, and opportunities for growth and development. The study also highlights the importance of creating a positive work environment that encourages and supports employees to perform well.