What is Reward Power in Leadership? How It Motivates Employees

Last Updated on February 26, 2024 by Milton Campbell

Reward power, a type of power in the workplace, plays a significant role in motivating employees and driving productivity. It refers to the ability to offer rewards, whether tangible or intangible, to influence the behavior and actions of others.

Understanding the potential benefits and drawbacks of reward power is crucial for leaders and organizations to create an effective and equitable reward system. In this article, we will explore reward power is, delve into different types of rewards, discuss strategies for harnessing reward power, and address ethical considerations.

Whether you are a leader looking to motivate your team or an employee seeking to understand the influence of reward power, this article will provide valuable insights. Join us as we unlock the potential of reward power in the workplace.

What is Reward Power?

Reward power is a form of power that holds the ability to influence others through the offering of rewards. It is one of the several types of power in the workplace, including coercive power, expert power, referent power, and legitimate power. However, reward power stands out as a powerful tool for motivating employees and driving desired behavior.

Defining Reward Power

Reward power is the ability to provide rewards in exchange for compliance, cooperation, or desired performance. These rewards can take various forms, ranging from tangible incentives such as bonuses or promotions to intangible rewards such as public recognition or increased job satisfaction.

Tangible and Intangible Rewards

Rewards offered through reward power can be classified into two categories: tangible and intangible. Tangible rewards are easily quantifiable and include bonuses, salary increases, vacation days, or flexible work arrangements. On the other hand, intangible rewards are more subjective and include public recognition, opportunities for professional growth, or a sense of accomplishment for a job well done.

Examples of Reward Power

To illustrate how reward power works, let’s consider an example where a sales team leader incentivizes their team members to achieve higher sales targets. The leader uses tangible rewards, such as monetary bonuses or salary increases, to motivate their team members to strive for excellence. Additionally, they offer intangible rewards, such as public recognition or opportunities for personal and professional growth, to create a sense of pride and motivation among team members.

Reward power can also be observed within the organizational hierarchy, where leaders have the formal authority to offer rewards to subordinates. For instance, managers can use reward power to recognize outstanding performance and provide incentives to encourage employees to go above and beyond their regular responsibilities.

Understanding reward power and its various forms of rewards is essential for leaders to effectively motivate their employees and drive performance within the organization. In the following sections, we will explore the advantages and disadvantages of reward power in more detail, along with strategies for harnessing its potential and ethical considerations.

The Advantages of Reward Power

Reward power offers several advantages for leaders and organizations looking to motivate their employees and enhance performance. Here are some key advantages:

1. Increased Motivation

One of the primary advantages of reward power is its ability to increase motivation among employees. By offering desirable rewards in exchange for desired behavior or performance, leaders can create a sense of enthusiasm and drive among their workforce. When employees feel that their efforts are recognized and rewarded, they are motivated to work harder and achieve better results.

2. Enhanced Productivity

Reward power has a direct impact on productivity within the workplace. When employees are motivated and engaged through rewards, they are more likely to put in additional effort and strive for excellence. The prospect of receiving tangible or intangible rewards provides an incentive for individuals to go the extra mile, leading to improved performance and increased productivity.

3. Improved Job Satisfaction

Reward power also contributes to higher levels of job satisfaction among employees. When individuals feel that their efforts are valued and acknowledged through rewards, they experience a sense of fulfillment and satisfaction in their work. This positive reinforcement enhances overall job satisfaction levels, leading to higher employee morale and retention rates.

4. Encourages Desired Behaviors

Reward power is effective in encouraging desired behaviors within the organization. By aligning rewards with specific goals and objectives, leaders can shape employee behavior in a way that promotes desired outcomes. For example, offering rewards for meeting sales targets or implementing innovative ideas incentivizes employees to engage in behaviors that drive success.

5. Fosters a Positive Work Environment

When reward power is utilized effectively, it helps create a positive work environment. Employees feel valued and appreciated, leading to a sense of camaraderie and team spirit. This, in turn, cultivates a supportive and collaborative culture within the organization, where employees are more likely to work together and support one another to achieve common goals.

6. Supports Personal and Professional Growth

Reward power can be leveraged to support the personal and professional growth of employees. By offering opportunities for skill development, career advancement, or access to training programs, leaders can use rewards to facilitate growth and progress among their workforce. This not only benefits individual employees but also contributes to the overall development and success of the organization.

Understanding the advantages of reward power is essential for leaders to harness its potential effectively. However, it is crucial to recognize that there are also disadvantages and potential pitfalls associated with this form of power. These will be explored in the next section.

The Disadvantages of Reward Power

While reward power has its advantages, it also has potential drawbacks that should be considered when implementing a reward system. Here are some of the disadvantages of reward power:

1. Can Create Unhealthy Competition

Reward power can create unhealthy competition among employees when rewards are limited or when they are in competition with one another for the same rewards. This can lead to a negative work environment where employees are more focused on beating each other than on achieving team goals.

2. Encourages Short-Term Focus

Reward power can create a short-term focus on achieving rewards, with employees prioritizing immediate gains over long-term company success. This can lead to a lack of innovation, reduced collaboration, and a diminished sense of teamwork.

3. Can Lead to Inequitable Treatment

If not implemented fairly, reward power can lead to inequitable treatment. When rewards are based on subjective criteria or when certain individuals receive more rewards than others, it can create resentment and dissatisfaction among employees, leading to lowered morale and increased turnover rates.

4. Can Diminish Intrinsic Motivation

Overreliance on reward power may diminish employees’ intrinsic motivation to perform well. When individuals become more focused on external rewards, they may lose sight of the intrinsic satisfaction and personal fulfillment of a job well done. In such instances, employees may become less motivated when rewards are not offered, or when reward structures change.

5. May Lead to Unethical Behavior

Reward power can lead to unethical behavior when rewards are used to influence behavior in inappropriate ways. For example, offering a reward to an employee to overlook safety regulations or to falsify data can lead to harmful or dishonest outcomes.

6. May Not Be Cost-Effective

Reward power may not always be cost-effective for organizations, as offering rewards can be expensive, particularly when they are structured as tangible rewards like bonuses. Over-rewarding employees can also lead to issues with budgeting, which can ultimately diminish success.

While reward power can be a useful tool for workplace motivation, it is important to recognize its disadvantages to mitigate potential negative outcomes. Next, we will explore some strategies for using reward power effectively and equitably.

Strategies for Implementing a Reward System

To harness the potential of reward power effectively, here are some strategies that leaders can employ:

1. Clearly Define Desired Behaviors

Before implementing a reward system, it is crucial to clearly define the desired behaviors and outcomes that will be rewarded. This ensures that employees understand what is expected of them and what they need to do to earn rewards. Clear and specific criteria help to avoid confusion or feelings of unfairness.

2. Align Rewards with Organizational Goals

Ensure that the rewards offered are aligned with the overall goals and objectives of the organization. This helps to direct employees’ efforts towards activities that contribute to long-term success rather than solely focusing on short-term gains. By linking rewards to strategic objectives, employees understand the significance of their contributions.

3. Consider a Mix of Tangible and Intangible Rewards

Utilize a mix of tangible and intangible rewards to cater to different employee preferences and motivations. While tangible rewards such as bonuses and incentives can be effective, intangible rewards like recognition, professional development opportunities, and increased responsibilities can also be highly motivating and cost-effective.

4. Make the Reward System Transparent and Fair

Ensure that the reward system is transparent and fair to maintain trust and avoid feelings of inequity among employees. Clearly communicate the criteria for earning rewards, the process for evaluating performance, and any relevant metrics. Regularly assess the fairness of the reward system and make adjustments when necessary.

5. Encourage Teamwork and Collaboration

Design rewards that encourage teamwork and collaboration rather than promoting solely individual achievements. This helps foster a positive work culture where employees support each other and work towards shared goals. Consider team-based rewards or recognition programs that emphasize collective success.

6. Monitor and Evaluate the Reward System

Continually monitor and evaluate the effectiveness of the reward system to ensure it is driving desired behaviors and outcomes. Collect feedback from employees to gain insights into the impact of rewards and make necessary adjustments. Regularly reviewing the reward system helps maintain its relevance and effectiveness.

7. Promote Intrinsic Motivation

While using reward power, leaders should also promote intrinsic motivation by fostering a work environment that encourages autonomy, mastery, and purpose. Recognize and appreciate employees’ intrinsic motivation and align rewards with these factors whenever possible. This helps ensure that employees are also internally motivated to perform well, even in the absence of external rewards.

By implementing these strategies, leaders can maximize the benefits of reward power and create a positive and motivating work environment. Remember to stay ethical and fair when using reward power, considering the potential drawbacks mentioned earlier.

Ethical Considerations with Reward Power

While reward power can be a valuable tool for motivating employees, it is important to consider and address ethical considerations to ensure fair and responsible use. Here are some ethical considerations to keep in mind:

Avoid Unintended Consequences

When designing a reward system, consider the potential unintended consequences that may arise. Rewards should not inadvertently encourage harmful or unethical behavior. Carefully assess the potential impacts and outcomes of the reward system to prevent any negative side effects.

Ensure Inclusivity and Fairness

An ethical reward system should be inclusive and fair to all employees. It should not discriminate based on factors such as race, gender, age, or any other protected characteristic. Consider providing equal opportunities for all individuals to earn rewards based on their performance and contributions.

Provide Meaningful and Relevant Rewards

Rewards should be meaningful and relevant to employees. Consider their interests, needs, and aspirations when designing the reward system. Tailoring rewards to individuals’ preferences and recognizing their unique contributions enhances the ethical use of reward power.

Promote Equity and Transparency

Exhibit transparency in the reward system by clearly communicating the criteria and process for earning rewards. Ensure that the system is based on objective and measurable performance indicators to maintain fairness and equity. Equally, make sure everyone has an equal opportunity to achieve rewards based on established criteria.

Regularly Evaluate and Adjust the Reward System

Continuously evaluate and assess the effectiveness, fairness, and impact of the reward system. Regularly gather feedback from employees to identify any ethical concerns or unintended consequences. Be willing to make adjustments to the system to address these concerns and maintain ethical standards.

Consider Long-Term Motivation

While rewards can be effective in the short term, consider the long-term impact on employees’ intrinsic motivation. Ensure that the reward system does not solely rely on external rewards but also fosters a sense of purpose, autonomy, and mastery. Balancing extrinsic and intrinsic motivation promotes ethical behavior and sustainable performance.

Encourage Ethical Behavior

Use rewards to reinforce and encourage ethical behavior within the organization. Choose criteria that align with the organization’s values and ethical standards. Rewards can serve as a positive reinforcement mechanism for individuals who consistently demonstrate ethical conduct.

By considering and addressing these ethical considerations, leaders can ensure that their use of reward power promotes fairness, inclusivity, and long-term ethical behavior within the organization. Ethical rewards systems strengthen employee morale, engagement, and overall organizational success.

Wrapping Up How to Use Reward Power

In conclusion, implementing a reward system in the workplace can be an effective tool for motivating employees, but ethical considerations must be taken into account. A fair and transparent reward system that is inclusive to all employees, provides meaningful and relevant rewards, and promotes long-term intrinsic motivation can lead to sustainable performance and organizational success.

By regularly evaluating and adjusting the reward system, and using rewards to encourage ethical behavior, leaders can ensure that their use of reward power promotes fairness, inclusivity, and long-term ethical behavior.