Reward System and Productivity of Employees in Health Care Organizations - Case Study Example

Reward system and productivity of employees in health care organizations A satisfied work force forms the basis of all health care organizations thathave achieved great success. The emergence of multi national companies and competitive business environment has prompted the organizations to let their reward strategies move from fringe to the main stream. The Managers of the companies often find difficulties with integrating the efforts of the entire staff members in order to accomplish the intended mission. The goals of employs can vary depending on their culture, job, age, economic status, character formation and the reward they gain from their organization. The individuals working under the same roof can not be assumed as the individuals with the similar goals. Scheduling the reward system is a highly significant responsibility of any management. When a company designs its rewards or incentives every member of the organization must be measured to obtain the profit of the arrangement. As the goals differ the individuals’ expectations about rewards for their performance also might be different. The motivating factor for every individual may not be the same. For instance, “those seeking money as the number one priority will be attracted to jobs where performance and reward are closely linked and performance is paid for in money preferably cash in the hand. Those who rank relationship highly will be attracted to jobs where relating with people is a major part of the work” (Hunt). The paper means to define the expected behaviors for health care organizations based on the theories of Hunt, Herschel, and Maslow and how the managers could introduce effective reward system to ensure the best productivity from their human resources. Major theories on motivation and work force productivity Motivation is the driving force in an individual’s life to accomplish the targeted goals. What actually motivates the individuals is a matter of controversy. In 1943 Abraham Maslow introduced his well known theory on man’s hierarchy of needs according to which human beings are motivated by their unsatisfied needs. The theory holds that the general physiological needs (safety, love and esteem) have to be fulfilled before a person become motivated to satisfy the future needs. The individual strives hard to move toward growth and finally attain ‘self actualization’. Therefore according to him, for ample workforce motivation the management has to identify the active needs motivation of the employees. So the fundamental needs or physiological needs must be satisfied before moving to advanced stage needs. A satisfied need no longer motivate the individual; instead the next higher need takes its place (Maslow Hierarchy of Needs). The ‘Motivation-Hygiene Theory’, introduced by Frederic-Hersberg (1959) purports that there are mainly six factors causing dissatisfaction and six factors causing satisfaction. Factors that produce dissatisfaction are company policy, supervision, relationship with the boss, work conditions, salary and relationship with the peers. The satisfaction factors are achievement, recognition, work itself, responsibility, advancement and growth. In his opinion factors causing satisfaction and factors causing dissatisfaction are entirely different. The opposite of satisfaction is not dissatisfaction but ‘no satisfaction’; similarly the opposite of dissatisfaction is not satisfaction but ‘no dissatisfaction’. The theory explains that there are two distinct human needs that every individual wants to fulfill. Among them the first psychological needs require money (food, shelter) and the other psychological needs that can be fulfilled only by activities that cause one’s growth (Herzberg’s Motivation-Hygiene Theory (Two Factor Theory). Another major theory that deals with the productivity of the human resource in an organization is the equity theory. The efforts a person put in his performance and the reward derived will automatically assign values to each of his further contributions. Although Money is the primary motivating factor for a worker it is not the only one. According to the equity theory the most highly motivated employee is the one who perceives his rewards are equal to his contributions. Conversely, every employee can not be treated in the same way. For instance, some leisure time might be the more motivating factor than a pay rise for a tired worker (Cory 2006). The sort of job people do also affects the priorities of their goals. Certain patterns of goals most likely push people in to certain jobs. While money has been used to reward them, the intrinsic motivation of working in a harmonious team has been eliminated in many jobs. Jobs offering recognition attract and strengthen those goals. The autonomy seeking individuals pay low concern for structure and risk, and pay a high concern for appreciation. It is difficult to define whether the job attracts the suitable job profiles or the individual is attracted by the job and then develop a suitable profile according to the job profile. Hunt believes that the former happens usually. People choose the career that is suitable to their profile. Yet the reverse also happens. Productivity and the role of rewards What is the behavior to be rewarded depends on the job and the criteria that the managements use to asses the performance of the individuals. Many organizations face challenges to create a satisfied workforce only because they fail to interpret the goals and to design a proper reward system to ensure the productivity. The expected behaviors in a health care organization can be generalized as follows based on the perspective of Hunt: Recruiting the right person for the particular job is the most important thing because the efficient manpower is the asset for any company (attract, join). If the career does not match with the individual’s profile the organization will obviously fail to satisfy the individual and vice versa. So the criterion for each career needs to be well defined and the profile of the candidate must be scrutinized. People with high aptitude and serious concerns toward their career are obviously expected in health organizations (Hunt, p. 39). The traditional styles of hospitals have been changing their hierarchical structure and reward systems. Today an organization with sophisticated, multi functional features can not be easily led to the anticipated goal by a single person. Therefore individuals who abide with the code of conduct of the organizations are one of the expected behaviors for reward (Comply). Such kind of workers would reduce the work load and enable the smooth functioning of an organization. Many organizations confront problems with dissatisfied and disobedient labors. Dedicated individuals who stick to their goals also must be identified and appreciated as expected behaviors (Continue, remain). Devoted employees are the back bone of any organization. Obtaining and retaining an efficient labor force is the main managerial challenge that every health organization is facing today. Motivation and rewards are the factors that determine whether an individual would continue in the same job or not. It is the sole responsibility of the management to revitalize the whole working community with adequate rewards and other motivating techniques. The next behavioral group is those who maintain the anticipated standards in their performance or gain great achievements (Perform). Performance of a person is determined by the motivation and the motivation comes from rewards. While working in an organization the individuals have to adjust with many different people having different objectives and mindset. The employees who cooperate with collogues (cooperate) have to be encouraged as the expected behaviors in a health care organization because they have a significant role in bridging the gap among the employees as well as between the employees and the company. There are situations when the expectations of the individuals and the objectives of organizations differ. As Hunt rightly puts it: “the moment an individual seeks employment in an organization is the moment a compromise begins”(p.39). It means while we gain something from an employment we have to give up something of our own and if the loss is higher than the gain the employee has to quit the job. In other words only when the reward is higher than the loss the effective motivation occurs. If so the only inadequacy to the effective performance is the poor rewards the organizations propose. Therefore two things are important to link the performance and rewards. First, the criteria for the performance must be appropriate to the career and secondly the objectives of the organization must be well interpreted because the wrong criteria will lead to inadequate performance. Usually the reward devise is influenced by the managers’ performance assessment. There are certain factors which interfere the effort –performance-reward equation. A system which offers promotion, high pay and other rewards to all but in reality provides to a few predictably brings frustration. Certain emotions like anger, hatred, and jealousy also are demotivating aspects for individuals to withhold their effort. The lack of individual commitment is another cause for the poor performance. The reason is that unless the individual initiate the commitment, the energy (E) the driving force is not released to achieve the goal. It happens when the reward is insufficient or unattractive to induce the individuals. So the effort-performance-reward equation has great significance. Different reward systems in an Organization Many health organizations fail to device effective reward schemes. They still follow a unadventurous method of paying salary or wage and these are paid on a regular basis may be daily, weekly or monthly which would hardly motivate the workers. Hunt classifies the possible reward systems as follows which can be applicable with health organizations too: Individual rewards: Individual rewards comprise of some of the common benefits organizations offers are vacations, sick leave, and pensions. Rewards like salaries, wages, commissions, bonuses and merit awards can be named individual rewards. These individual rewards are important factors in attracting individuals to work for a firm. Group rewards: Group rewards refer to those rewards given to a group such as incentives, parties and group bonuses play a vital role in retaining the workers in the firm. Group rewards have great importance in health care management more than in any other field. Compliance rewards: Compliance rewards are provided with a view to produce structured predictable behavior. The compliance rewards are important in satisfying official expectations, structural controls and the reward of doing it right. Intrinsic rewards: Job satisfaction is another reward which can be defined as intrinsic satisfaction and challenge goal congruence. In this case the reward is an emotional well being from believing in or being committed to a super ordinate goal. If the firm needs to stimulate creativity then the job satisfaction rewards of challenge, stretch, autonomy are more effective than the compliance rewards. Moreover, in such conditions the compliance rewards might be counter productive (Hunt) health care service is the career branch where people are greatly motivated by job satisfaction rewards. Links between rewards and behavior During the past several years The Total Rewards concept has gained wide approval by health organizations. The concept of total reward is the result of a new thinking about the strategic implementation of compensation and benefits to attract motivate and retain the employees. In total rewards approach an organization clearly communicates its unique rewarding offer in a consistent, differentiate package. Organizations have revised the effect of multiple rewards to attract, motivate and retain the individuals (Rumpel & Medcof, 2006). The total reward system enables the hospital administrations to do well in recruiting the desired individual behaviors. A strategic reward offering will identify the behaviors that support the achievement of managerial strategy. Well designed total rewards communicate all the rewards that are accessible to employees and are required to achieve those rewards. Thus by raising the awareness and desirability of the accessible rewards, a health organization can identify, support, induce the desired behaviors. It also helps the reward strategy to take into account which rewards are effective to achieve the desired attraction, retention and motivation effects. If the rewards offered are not attractive to hospital employees including doctors or if employees are unaware of the rewards, the desired behavioral effect does not occur (What is total reward?). So in order to motivate the manpower in a health care organization the team that designs and determines the incentives and rewards strategy must consider different dimensions of individual perspectives and all possible motivating factors that would eventually contribute to the accomplishment of the desired goal of the organization. The total reward concept presumably adds to the success if it is implemented in health care organizations. The rapid changes taking in to account a health care organization can include experts from inside or outside sources to design the appropriate reward system. There should be an identical code of conduct for all hospital staffs to motivate the compliance behaviors and discourage disruptive behaviors. Better integration, professional understanding and fellowship also must be regarded. . Here is an example how a health care organization reward its staff. It would help to know whether such reward system is fruit bearing or not. Completion of service year bonus: It ensures an additional amount equal to one month’s basic salary to the eligible candidates who successfully enter in to a second year or complete the subsequent annual contract. Bonus for exceptional performance: It is the bonus that may be given to an employee who has made a significant and exceptional contribution to the successful accomplishment of the hospital’s mission. Outstanding performance reward: It is an incentive in the form of a two-step or more increase in pay for an employ with an overall performance evaluation from 4.5 and above. Yearly recognition day: Eligible Candidates will be selected from each department on this day. Evaluating critically the reward systems of the above mentioned health care organization, one can find that the reward system has its own pros and corns. The reward system would attract new candidates perhaps unluckily only particular category of behaviors that have money as their motivating factor to achieve the desired goals. Moreover it is inappropriate to motivate the desired individual behaviors for a health care organization. For example, the completion of the service year bonus becomes a regular yearly basis reward and thus it may not be satisfactory to motivate or retain the desired behaviors. Moreover the system has failed to introduce group incentives or rewards to motivate the different departments as a whole while the harmonious behaviors have great impact in health care organizations. The fiscal importance of the strategy would also lead to goal disparities which can adversely affect the smooth functioning of the organization. The recognition and rewards can greatly determine the success or failure of an organization. Intrinsic rewards and group rewards should be given enough priority in health care organizations because under traditional reward system an individual could succeed even when the team fails. The reason is the lack of goal alignment. Today companies are targeting specific incentives that align with their business goals. Likewise hospitals also need to revamp their human capital management and reward strategies and departmental structures. The system should include all different types of rewards that would attract, motivate and retain the desired individual behaviors for participating in health engagement activities. Bibliography Rumpel, Steven & Medcof, John W 2006, Total Rewards: Good Fit for Tech Workers, Industrial Research Institute, Inc, pp. 27-35 (provided by the customer). Hunt, John W, Managing People at Work: A Manager’s Guide to Behaviour in Organizations, 3rd edn, pp. 29-44 (provided by the customer). 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