Awards And Recognition

Abstract

Rewards motivate employees by increasing job satisfaction, commitment, and productivity in the organization. Rewards have been shown to increase productivity by 20 to 30 percent. Award distributions should be situation-dependent, equitable, immediate, and should be targeted toward teams. A variety of reward types should be used because different people have a different value system. One study showed that when firms offered monetary and non-monetary rewards they had productivity increase 17 percent. A large study on management also found that 50 percent of middle managers do not believe pay is tied to performance. Healthcare leaders should be aware of the appropriate method of award distribution; healthcare is being run more like a business and the retention and increased productivity of the employees is critical toward

maximizing organizational efficiency.

Introduction

Imagine you are months from completion of a Masters degree in Healthcare Administration and are on the verge of interviewing for leadership positions that will utilize the knowledge gained. In your leadership class you were taught that motivating employees is very important and the offering of rewards is one way to motivate. You have managed people before but were not sure how to properly reward their performance. There is a desire on your part to prove the worthiness of the degree and demonstrate to your prospective employers that significant knowledge was gained in the program. The purpose of this paper is to discuss why rewards act as a motivator and what employee rewards should be used for increased employee performance in healthcare organizations.

Why Rewards Should Be Used

The current environment of rising healthcare costs and fierce global competition necessitates that healthcare leaders be able to motivate employees to maximize resources. Healthcare costs are rising at a rate higher than inflation, reaching $2 trillion in 2004 (Abelson, 2005). One such example is the soaring cost of medical devices. The rise in medical devices is the primary reason hospital care has become the largest component of the nation's annual health bill. Healthcare providers are the ones who outfit patients with these devices, prescribe medicines, and treat patients. Today's health care providers face expanding workloads, fewer resources, greater patient expectations, increasing threats (e.g., malpractice lawsuits), and closer scrutiny, especially from third-party providers. The art of healing has been transformed into a business, with a push for the efficient use of dollars by all parties. The rise of prices and managed care leave most consumers with a small range of healthcare options, but those alternatives present the consumer with choice. Therefore, it is important as a healthcare administrator to have a motivated and effective workforce to encourage the patient to continue using that facility and its doctors. The global issue is how to get the health industry to become more effective and efficient in the use of its resources. One way to do that is by motivating the human capital through the use of rewards.

The eventual success of a corporation lies more in its intellectual and systems capabilities, or human capital, than in its physical assets (Pfeffer & Veiga, 1999). The culture and capabilities of an organization, derived from the way it manages its people, are the enduring sources of competitive advantage. Today's leaders must begin to take seriously the adage that people are the most important asset. Current research increasingly points to a direct relationship between an organization's financial success and its commitment to management practices that treat people as assets (Smith & Rupp, 2003). Argyris (1964) went so far as to declare that an organization's main source of energy derives from the individuals within that organization. The same techniques that work elsewhere in business can bring success in medicine, whether you're working in clinical practice or administration. This paper applies the effect of motivation and rewards to all organizations, but when appropriate, makes special mention of implications to healthcare organizations.

Rewards motivate employees by increasing job satisfaction, commitment, and productivity in the organization. Job satisfaction is defined as the feelings an employee has about the job. It encompasses pay, work, supervision, opportunities, conditions, and organizational practices. The majority of studies show that employees who are experiencing job satisfaction are more likely to be productive employees (McNeese-Smith, 1999). In contrast, disgruntled employees may vent their frustrations by being rude to patients, performing poorly, quitting, or complaining to upper management. In extreme situations some supervisors may even face lawsuits for treating these subordinates unfairly. Since job satisfaction is positively correlated with pay and benefits, a leader can use these to motivate and reward subordinates.

Rewards not only motivate through improved job satisfaction, but through stronger commitment to the organization. Employee commitment measures the willingness of an employee to remain invested in, and continue to work for, an employer. It is the strength of an individual's identification with and involvement in a particular organization, and is characterized by a strong belief in the values and goals of the organization. It has been shown to be positively correlated with both productivity and job satisfaction (McNeese-Smith, 1995). The more an employee believes his performance is appreciated, the more committed that employee will be. Appreciation is a reward that can be given in the form of money, recognition, and changes in the level of job responsibility. People work harder because of the increased involvement and commitment that comes from having more control and say in their work (Smith & Rupp, 2003).

Commitment of employees to an organization is becoming increasingly important in the current financial environment. Efficient support staff are becoming harder to recruit and train, as the technology of the workplace speeds along at a blinding pace. In past generations, employees remained with a company for the duration of an entire career. Today, people change jobs several times during their working years, and many change careers altogether. This adaptation to change gives employees more options. When a well-trained employee quits, the business incurs not only out-of-pocket hiring and training costs, but the opportunity cost of having a less effective, new employee who will require 3 to 6 months before becoming a productive,