Understanding what a reward system is, is the first step, and altering it to suit your needs is the cost.
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"The meaning of rewards is somehow related to the field of motivation because motivation is usually defined as the drive to achieve the organizations’ goal. This brings the question that why people should develop such a drive and why they should care whether the organizations’ goal is achieved or not (Maltby and Day, 2001). The answer is the person who develops such a drive desires the rewards and benefits as a return when they achieved the goal of the organization (Lefton et al., 1977). Moreover, the rewards are strongly related to the level of job motivation, leading to the research question: Discuss whether reward systems are related to motivation at work?"
The objective of the present research is to investigate the relationship between intrinsic and extrinsic rewards and motivation at work. The empirical evidence of Tziner (1983) reveals that the better the correspondence between rewards and needs, the better the employees motivation and satisfaction. Furthermore, this study is accounting the relationship, between monetary and non-monetary rewards and motivation at work, realizing that human needs can be recognized as tangible and intangible. Therefore, correlating goals and needs provides a coherent understanding toward reward strength and motivation at work.
In order to explain what motivates employees, it is important to give a definition of motivation. Also, motivation has been described as one of the most critical concerns of modern organizational research (Baron, 1991).
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“Motivation is a psychological concept related to the strength and direction of people.” (Torrington and Hall, 1987, p.351). “Motivation is the process whereby goals are recognized, choices are made (consciously or not) and energy is directed towards achieving the goal.” (Hunt, 1992, p.5-6).

The figure above, process of motivation, demonstrates that it is a need-related model that is initiated by the conscious and recognition of unsatisfied needs. In addition, needs concentrate on the deficiencies which an individual experiences at a particular time such as physiological (i.e. a need for food), psychological (i.e. a need for self-esteem) or sociological needs (i.e. a need for social interaction). Needs are considered as energies for behavioral responses. When the need deficiencies are present, the individual is more prone to a manager’s motivational efforts. These needs create selected wants, which individual believed that it might satisfy their needs and wants, and it is expected that these will influence goal direct behavior.
Needs deficiencies energize a search process for ways to reduce the tension caused by these deficiencies? Managers then evaluate the behavior and performance in order to assess suitable types of reward or punishment for employees. However, each individual will have different unique characteristics as Robbins (1990) said:
a) Each individual develop different patterns of needs, values, and perceptions.
b) Each individual characteristic is not constant, but continue to develop as they encounter new problems and experiences.
Reward Systems Motivation is the choice to channel energy into certain activities in the expectation that valued goals will be rewarded. As McKenna (2000, p.555) states that “Reward systems are at the disposal of managers in order to attract, retain, and motivate people in the desired direction.” It could be said that rewards are the most useful factor to motivate people in organizations.
Motivational theories are directly relevant to reward systems and they often distinguish between intrinsic and extrinsic rewards (Naylor, 2004). However, it is important to first look at the rewards valued by individuals because most people will put in little effort unless the reward has value (Vecchio, 1995). Both intrinsic and extrinsic rewards are described as follow:
Intrinsic Rewards Franken (1988, p.470) stated that “Intrinsic motivation simply means that a task or activity is enjoyable, independent of any extrinsic rewards.” It can also be defined as internal drivers that influence people to behave in particular ways and directions. In other words, this type of motivation refers to psychological rewards, which include responsibility, a sense of challenge and achievement, freedom to act, opportunity for advancement, development of skills and abilities and interesting, and challenging work (Calder and Staw, 1975).
Intrinsic reward is achieved by satisfying individual needs for achievement, responsibility, variety, challenge, influence in decision making, and membership of supportive team. As Gruneberg and Wall (1984) pointed out, individuals do not seek compensation or benefits but also seek intrinsic rewards such as feelings of competence, achievement, responsibility, personal growth, and meaningful contribution. Intrinsic rewards, which are less visible, relate to the design of jobs, which plays a significant role in creating opportunities for this kind of reward (Wiersma, 1992).
Extrinsic Rewards This factor is relevant to tangible rewards, for instance, salary, fringe benefits, promotion, status symbols, security, and the conditions of work, provided by the organization to motivate its employees (Wiersma, 1992).
Extrinsic rewards derive from sources that are external to the individual, are provided by organizations, and are achieved by recognition, skills development and learning and career opportunities. These include salary, wages, bonuses, commission payments, working conditions, company car, and pension (Vecchio, 1995). Some extrinsic rewards are explained as the following:
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-------------------- I am whatever Darwin needs me to be.
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