Project Team Rewards
Literature Review
22
Results-based rewards mean payment by piecework. It is widely
accepted by the
modest reward proponents that payment by results can work for very simple and quantity
focused jobs such as answering phones calls in call centres (e.g. Miller 1991, Ellemers et
al. 2004, and Rosenbloom 2001).
Performance-based rewards are the most common type of rewards (IRS Employment
Review 2001 in Armstrong 2002). Usually, certain objectives are agreed between
employees and their superior and later the employees are assessed (Wilson 2003).
Depending on the assessment, the employees get
a reward, often in the form of a cash
bonus. Performance-based rewards need good benchmarks that the actual performance can
be measured against. Otherwise, employees will feel assessed unfairly (Wilson 2003).
Competence-based rewards focus on “the ability to perform” (Armstrong 2002:231).
Competence is only measurable in qualitative terms and usually “hangs on the back of an
existing [performance-based reward] system” (Sparrow 1996 in Armstrong 2002:297).
The advantage is that long-term employee development is supported. On the other hand it
is cost intensive and a danger exists that value for money is low (Arthur 2001). It is more
suitable for quality focused work where the way something is done should be rewarded
rather the results or actual performance. That means even if employees do not reach a goal
or perform not as well as originally assumed they might still be rewarded if the assessment
reveals that they brought out the best of the job.
Skill-based rewards support the development of skills. It makes
sense when companies
want flexible employees (Gibson & Cohen 2003). The use of skill-based rewards supports
the long-term development of the employees and can be cost intensive. Skill-based
rewards are suitable for qualitative jobs and are the contrast to result-based rewards.
3.4.6. Reward Type
The term reward
functions as an “umbrella” (Filipczak 1993:20) for incentives
and
recognition.
Figure 4
(next page) provides a comparison between recognition and
incentives and Table 8 (next page) some examples. Incentives tend to be financial rewards
given for reaching an agreed objective. Their purpose is to motivate employees
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