Literature Review on performance management systems and their links Essay

Literature Review on performance management systems and their links with rewards plans - Essay Example That debate has been carried on for centuries and has been reinforced in the equity and tournament theories of motivation. This paper will evaluate the significance of monetary rewards and then go on to discuss the concept of equity in pay. The paper will also discuss the importance of non-monetary rewards as well as performance management as a good creator of motivation. The paper will conclude with discussing the importance of intrinsic motivation. Some of the greatest theorists like F. W. Taylor, Abraham Maslow and Herzberg have all emphasized the significance of monetary rewards. Taylor’s view is rather conservative in that he believes that money is the sole motivator of human work. He believed in the idea of the ‘economic man’, and said that people were only motivated by self-interest. Taylor, therefore, gave much importance to the idea of pay-per-piece, because he said that this would enhance the speed of work. This theory meshes in well with the research of Armstrong (2006). Armstrong (2006) conducted an extensive research on the relationship between pay and the performance of the employee. The following table shows the interrelationship between performance ratings and pay ranges. This empirical research conducted by Armstrong (2006) illustrates the positive relationship between the two variables and holds evidence to the fact that pay really does impact performance. However, pay is not the only source of return for workers, especially nowadays. Other form of non-cash rewards are used commonly by many firms to enhance motivation. Zeidner (2010) reports that gift cards or certificates are the most popular form of non-cash rewards and are used by 38% of the companies today. This is followed by other forms of rewards including merchandise (19%), dinners (19%), special trips (19%), trophies or plaques (18%), top-performer listings (12%), honorary sales clubs (7%) and special parking spots (2%). Maslow’s hierarchy of needs is recognized as one