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Dewi Andriani. (2022). Reward System Analysis on Employee

Performance Improvement. Journal Eduvest. Vol 2(6): 1.102-1.107

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2775-3727

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Eduvest – Journal of Universal Studies

Volume 2 Number 6, June, 2022

p- ISSN 2775-3735- e-ISSN 2775-3727

REWARD SYSTEM ANALYSIS ON EMPLOYEE

PERFORMANCE IMPROVEMENT

Dewi Andriani

Muhammadiyah University of Sidoarjo, Indonesia

Email: dewiandriani@umsida.ac.id

ARTICLE INFO ABSTRACT

Received:

May, 26

2022

Revised:

June, 13

2022

Approved:

June, 17

2022

This research is motivated by the phenomenon of giving

rewards that are not evenly distributed. The purpose of this

study is to analyze the importance of the reward system in

improving employee performance. This research uses a

qualitative method with a literature review approach. The

results of this study indicate that one form of reward is the

provision of incentives. Incentives will enhance employee

motivation in an effort to achieve the goal of improving

performance. Motivation is an indicator that affects

performance because it is an important driver that causes

people to work is the need that must be met. Thus, through a

reward system in the form of incentives, it can generate

employee work motivation, where motivation is the main

factor in improving employee performance so as to increase

employee productivity and welfare.

KEYWORDS

Rewards, Performance, Employees

This work is licensed under a Creative Commons

Attribution-ShareAlike 4.0 International

INTRODUCTION

Starting in the 1990s, a new paradigm emerged, commonly known as the New Public

Management/NPM (Akbar, 2015). The emergence of this paradigm is the result of sharp

criticism directed at public sector organizations, which are often ineffective, ineffective,

always losing money, poor quality, and poor innovation and creativity. NPM focuses on

performance-oriented rather than policy-oriented public sector management. As a country

that also wants to improve, Indonesia is trying to implement the NPM paradigm, although

it is pessimistic about its ability to implement it (Simbolon, 2016). In Indonesia itself, the

implementation of performance management in public sector organizations has actually

 
Dewi Andriani  
 
Reward System Analysis on Employee Performance Improvement  1.103 
started  since  the  issuance  of  Presidential  Decree  Number  7  of  1999  concerning 
Performance Accountability of Government Agencies (Pamungkas, 2012). 
Human resource management is a field of management that specializes in the study 
of relationships and roles in organizations (Yusuf & Al Arif, 2015). This is because human 
resource management regulates the workforce in an organization to achieve organizational 
goals and employee job satisfaction. Human resource management can also produce good 
performance  in  the  company  through  assessment,  and  provide  remuneration  to  each 
member of the organization according to work ability (Daya, 1996) 
Rewards is a set of policy systems developed by organizations to reward employees 
for their business value, skills, abilities and accountability to the organization. Rewards can 
be in the form of providing incentives to employees (Ria, 2018) 
According to (Rachmawati, 2021), incentives are: "a form of performance-related 
payment that acts as profit sharing for employees". Meanwhile, according to (Iqram, 2019), 
incentives are compensation plans that link compensation with productivity. Motivation 
will increase employee motivation, strive to achieve the goals that have been set, employee 
job satisfaction, increase employee productivity, maintain employee loyalty and stability, 
improve employee discipline, create a good working atmosphere and relationship, increase 
employee  creativity  and  engagement,  and  increase  benefits  and  improve  employee 
performance. 
Performance is the result of work done by employees. According to Mangkunegara, 
performance is the result of the quality and quantity of work achieved by an employee 
while carrying out the tasks assigned to the employee (Fachrezi & Khair, 2020) 
(Nurusshobakh, 2017) showed in a study that offering incentives affects employee 
performance.  Talking  about  a  performance,  of  course,  cannot  be  separated  from  the 
productivity  of  HR  (human  resources).  However,  currently  the  reward  system  through 
incentives is only applied in a few companies. Based on the context of the problem that has 
been  described,  the  authors  believe  it  is  important  to  focus  on  the  factors  that  affect 
employee performance. 
RESEARCH METHOD 
 
The research method used in this study is a qualitative descriptive method. The 
type of data used in this research is qualitative data, which is divided into primary data and 
secondary data. Sources of data obtained through library research techniques that refer to 
resources available online and offline, such as: scientific journals, books, and news from 
trusted sources. These sources are gathered from discussions and links from one message 
to another. Data collection techniques used in this study were observation, interviews and 
research. Analyze data and draw conclusions. 
 
RESULT AND DISCUSSION 
A. Rewards 
1. Understanding Rewards 
According to Handoko (2011: 55), the award is a form of appreciation for efforts to 
obtain  professional  workers  in  accordance  with  the  requirements  of  the  position,  and  a 
balanced  coaching  is  needed,  namely  efforts  to  plan,  organize,  use  and  maintain  the 
workforce. in order to carry out tasks effectively and efficiently (Mora et al., 2019). 
 
2. Function and Purpose of Reward 
According to (Anwar, 2021), some of the bonus functions are as follows: 
a. Get more motivated and push yourself to make it happen. 
b. Give a sign to a stronger man. 

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c. Universal.

In accordance with the purpose of giving gifts, the purposes of giving gifts are as

follows (Prambudi, 2021):

a. Attracting (stimulating) someone to want to join the company.

b. Retain existing employees to continue working with the company.

c. Provide more encouragement to retain employees. To achieve the desired

company goals, the reward function must be carried out before the deviation occurs, so that

it is more preventive in nature than the reward action that occurs after the deviation.

Therefore, the purpose of giving rewards is to keep the results of implementing activities

in accordance with the original plan, and actually implementing the rules and instructions

that have been set, because a good reward will create a reward goal.

3. Reward Indicator

According to (Darwis, n.d.) the main indicators of the reward system consist of the

following elements:

a. Incentive

In this case, incentives are a very important component of employee rewards,

including additional financial compensation in the form of bonuses and stock awards (stock

options or stock grants). Rewards for high performance can be given in the form of

incentives or issuance of shares to employees.

b. Well-being

Benefits can be measured by value. The organization offers various employee benefit

programs as incentives for work performance, such as: benefits, including employment

benefits, structural benefits, health benefits, children's education benefits, family benefits,

and old-age benefits. Official vehicles, private drivers, official residences and other work

facilities. Spiritual benefits such as entertainment, holidays, worship packages, etc.

c. Career development

Career development is the prospect of future performance. Career development is

important for employees who perform satisfactorily, so that employees are more valuable

and able to provide better performance in the future. Career development gives excellent

employees the opportunity to learn and improve their knowledge, skills and expertise.

d. Psychological rewards

Psychological rewards are critical to employee value, although they are difficult to

measure. Good psychology can generate motivation and affect employee performance, and

psychological rewards include giving trust, recognition, and praise.

B. Performance

1. Understanding Performance

There are various definitions according to experts related to employee performance.

(Oktaviani & Darmo, 2017) defines performance as the result of work carried out by

individuals or groups, such as work standards, goals set by normative guidelines over a

certain period of time, standard operating procedures, standards, and defined functions. Or

apply or apply to companies. Meanwhile, (Wibowo, 2013) argues that performance is a

real behavior shown by everyone, and is a work achievement produced by employees

according to their role in the company.

Therefore, performance can be said to measure a series of work results contributed

by an employee, comparing the effort and time expended with the results achieved by the

goals previously set by the company leadership.

Reward System Analysis on Employee Performance Improvement 1.105

2. Performance Indicators

According to Bangun (2012:233) an employee's performance appraisal, his work

standards must be clearly measured and understood through:

a. Number of jobs

The amount of work produced by an individual or group as a standard of work. Every

job has different requirements and therefore requires employees to fulfill these

requirements with the appropriate knowledge, skills and abilities.

b. Quality of work

Every employee in a company must meet certain requirements to produce work of

the quality required for a particular job. Every job has certain quality standards that

employees must conform to. If the employee is able to do his job in accordance with the

quality requirements demanded by the job, then his performance is good.

c. Punctuality

Certain types of work must be completed on time because they depend on other jobs.

Thus, if one part of the work is not completed on time, it will hamper the work of the other

part, thus affecting the quantity and quality profession.

d. Presence

Certain types of work require employees to work 8 hours a day, 5 days a week.

Employee performance depends on the level of employee attendance.

e. Cooperation ability

For some types of work, two or more employees may be required to make

adjustments, thus requiring cooperation between employees.

3. Factors Affecting Performance

According to Handoko (2001: 193), the factors that affect performance are:

a. Motivation

An important driver that drives people to work is a need that must be met. These

needs are related to human nature to get the best results at work.

b. Job satisfaction

Job satisfaction reflects how a person feels about his job. This can be seen from the

positive attitude that employees have towards their work and everything they face in the

work environment.

c. Stress level

Stress is a state of tension that affects emotions, thought processes, and the current

situation. Excessive stress can interfere with job performance by threatening a person's

ability to deal with the environment.

d. Working conditions

The operating conditions that can affect performance are the workplace, ventilation

and lighting of the workplace.

C. The relationship of giving rewards to employee performance

According to Mahmudi (2012: 187) the main indicator of the reward system. One

form of reward is the provision of incentives. Incentives are a very important reward

component for employees in this case including additional financial compensation in the

form of bonuses and the provision of shares (stock options or stock grants). Rewards for

high performance can be given in the form of incentives or giving shares to employees.

Incentives will increase employee motivation in an effort to achieve the goals that

have been set, employee job satisfaction, increase employee productivity, maintain

employee loyalty and stability, increase employee discipline, create a good working

Eduvest – Journal of Universal Studies 
Volume 2 Number 6, June 2022 
 
1.106    http://eduvest.greenvest.co.id 
atmosphere  and  relationship,  increase  employee  creativity  and  participation,  improve 
welfare employees, enhancing the employee's sense of responsibility towards their duties. 
Motivation is an indicator that affects performance because it is an important driver 
that causes people to work is the need that must be met. These needs are related to human 
nature to get the best results in their work. 
Thus, through a reward system in the form of incentives, it can generate employee 
work motivation, where motivation is the main factor in improving employee performance 
so as to increase employee productivity and welfare. 
 
CONCLUSION 
 
This  research  conclude  that  one  form  of  reward  is  the  provision  of  incentives. 
Incentives will enhance employee motivation in an effort to achieve the goal of improving 
performance. Motivation is an indicator that affects performance because it is an important 
driver  that causes people to work is the  need  that must be met. Thus,  through  a reward 
system  in  the  form  of  incentives,  it  can  generate  employee  work  motivation,  where 
motivation  is  the  main  factor  in  improving  employee  performance  so  as  to  increase 
employee productivity and welfare. 
 
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