Reward Practice

Reward practice is essential as to be reinforced and as an incentive motivator towards achieving the organizational overall performance. Those employees with the astonishing performance will expect that their exceptional contributions will be recognized and also to be appreciated by the top management. At present, reward practice have been adopted by numerous organizations either both organizations in public or private sector. As stated by Bowen (2000) [1], in a world of downsizing, doing more with less, reward/ recognition are vitally important to boost morale and creating goodwill between employees and managers.
The employees' perception towards the transparency of a reward practice depends on two characteristics which refer to the communication and complexity. The need for a transparent system involves the preferences towards having a clear communication of how the reward are distributed and offered and also the concerns on the understanding of the methodologies, measures and targets used while introducing any rewards. The employees need to understand the connection between the company's business objectives, how they contribute, and how they are rewarded. Perceived uncertainty decreases the effectiveness of incentive compensation (Gibbons, 1998) [2].

Ivana, Lovorka, and Nevenka (2009) [3] founds that reward practice must satisfied a full and open transparency regarding awards, the communication of the availability of the rewards, the criteria to be satisfied, and the identification of the award recipients. Porter, Lawler, and Hackman (1975) [4] states that the reward process as being transparent should be demonstrated by the clarity of the link between the extra effort and the reward being given. they was also concerns with the way rewards are administered within the reward system by suggesting that, in order to acquire positive motivational properties, the distributed incentive scheme rewards made by organizations have to be performance-dependant based. According to Janssen (2001) [5], empirically those managers who perceived the effort reward fairness perform better than managers who perceive they are unfairly rewarded. Even though the need for having fairness in rewarding others in one organization seems to be clearly understood theoretically, biased, inaccurate and inflated, the performance evaluations have often been reported in economic studies (Prendergast, 1999) [6].
Hence, the perceived fairness is expected to have a positive relationship with the reward effectiveness in one respective organization. According to Baker (2002) [7], the definition of controllability is the extent to which the employees are able to control or influence the outcome. The effect regarding a certain amount or degree of effort on the employees performance measurement should vary as minimum as possible in order to have such control over one's reward. Therefore, it can be claims that the stronger the degree of the perceived controllability over the reward practice is, the higher will be the level of effectiveness of the reward towards achieving the employees' performance.
Galbraith (1973) [8] claims that the reward system should be aligned to motivate employees' performance that is consistent with the firm's strategy, attract and retain people with the knowledge, skills, and abilities required to realize the firm's strategic goals, and create a supportive culture and structure. As discussed by Bretz, Milkovich and Read (1992) [9], the current performance of the employees can be uplift by having a well developed performance appraisal, reward and the bonus system. So, the rewarding programs itself should have to influence the employees' performance in the positive way as expected by the employer. They also adds that the performance ratings can theoretically be used to identify further training needs, management problems, and candidates for promotions, job rotation, and dismissals or layoffs. A well-organized reward system will motivate and energize employee performance because it recognizes the achievements of employees. Reward system implemented by organization will influence employees' behaviour and attitude towards their job if the rewards satisfy their needs and help them to reach their personal goals. When employees desire to get the rewards, they will change their behaviour in order to achieve the minimum level of performance required by organization [2].

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