Organizational performance has a significant impact on rewards, as it directly influences the number of resources available to allocate to employee compensation. A company that is performing well is more likely to have the financial means to offer competitive salaries, bonuses, and benefits. On the other hand, a company that is struggling financially may not be able to offer the same level of rewards, even if employees are performing at a high level.

Additionally, high levels of organizational performance often result in a positive organizational culture and higher employee morale, which can also impact rewards. For example, companies that have a strong sense of purpose and a positive workplace culture are more likely to attract and retain top talent, leading to increased productivity and performance (Muogbo, 2013). As a result, employees in these organizations may be more likely to receive recognition and rewards for their contributions.

The type of rewards offered can also impact organizational performance. For example, if a company primarily focuses on financial rewards, such as bonuses and stock options, it may not be effectively motivating employees in other areas, such as creativity, innovation, or teamwork (Ibrar and Khan, 2015). On the other hand, organizations that offer a mix of rewards, including recognition, opportunities for growth and development, and a supportive work environment, may see an improvement in overall performance.

It’s important to note that rewards should align with the goals and values of an organization. If a company’s rewards system is misaligned with its overall mission and objectives, it can actually hinder performance. For example, if a company values collaboration but primarily rewards individual performance, employees may be less likely to work together effectively. Organizational performance and rewards are closely linked, with high levels of performance often leading to increased rewards, and vice versa.

References

Ibrar, M. and Khan, O., 2015. The impact of reward on employee performance (a case study of Malakand Private School). International letters of social and humanistic sciences, 52, pp.95-103.

Muogbo, U.S., 2013. The impact of employee motivation on organisational performance (a study of some selected firms in Anambra state Nigeria). The international journal of engineering and science, 2(7), pp.70-80.