Preferences for Performance Based Employee Rewards: Evidence from Small Business Environments

By Kowalewski, Susan J.; Phillips, Suzanne L. | International Journal of Management and Marketing Research, May 1, 2012 | Go to article overview

Preferences for Performance Based Employee Rewards: Evidence from Small Business Environments


Kowalewski, Susan J., Phillips, Suzanne L., International Journal of Management and Marketing Research


ABSTRACT

Rewarding and motivating employees is extremely important to organizations because employees are a critical resource for success. The primary objective of this study was to determine if there are gender based employee preferences for performance rewards in small business environments. The study was conducted using surveys provided to employees and supervisors at small business establishments in Western New York State. The employee survey asked subjects to rank motivational items, situational reward/consequences, and social and economic aspects of work environments based on their preferences. The survey provided to supervisors asked them to rank the same items based on what they thought their employees would prefer. The results of the study indicated that there was no significant difference between male and female employees in terms of reward and motivational preferences. However, there were differences between what supervisors thought employees wanted and what employees actually valued. This study included results from 135 employee and 28 supervisor surveys were distributed, with 100 (74%) employee and 18 (64%) supervisor surveys returned. The results of this study indicate that social rewards were more valuable than economic rewards that would be valuable to small business owners and managers to develop programs to reward and motivate their employees.

JEL: M10

KEYWORDS: Small Business, Rewards, Gender, Employee, Manager

INTRODUCTION

Employees are a critical resource for small business owners and managers. They need to be motivated and rewarded so they recognize how vital they are to the organization. This in turn will inspire employees to contribute to the company's ability to grow and expand; increasing retention and decreasing turnover. However, small businesses typically have limited resources for providing incentives and performance rewards for their employees. The opportunity for an employee's advancement may also be constrained in a small business because there is typically no organizational chart or corporate ladder to climb.

The combination of a small business owner's limited resources and their dependence on highly motivated employees makes it extremely important that the employer provide incentives and rewards that the employee values. Understanding gender influences in this respect can assist in developing reward and incentive programs that are of value to the employee. According to Thomas (2009), extrinsic rewards; such as salary is a significant motivator for workers. In the same thread, unfair salary can be a strong demotivator to employees. There have been several studies conducted over the past 50 years that explored the differences between male and female perceptions regarding work satisfaction, work-related rewards and values (Kovach, 1995; Marini, Fan, Finley, and Beutel, 1996; Mottaz, 1986; Ross and Mirowsky, 1996; Schul, Remington, and Ben, 1990). This topic was first considered due to the increase in the number of females in the workforce during the post- World War II era. During the feminist movement of the 1960's and 1970's, the driving force behind these studies was the lower-paying positions afforded to most females. As women continued to attain higher level positions and commensurate higher pay, the focus shifted to potential differences in leadership styles of female managers in contrast to their male counterparts, as well as motivational factors for female employees as compared to those for males. The primary objective of this study was to determine if there are gender based employee preferences for performance rewards in small business environments.

All of the studies referenced focused on larger companies or specific sectors of industry. There is limited research that looks at how gender influences employee preferences for performance rewards and motivational incentives in the small business environment. In addition, the information available is not current with the most recent studies occurring during the late 1990's. …

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