What should rewards be based upon in an organization?

Rewards in an organization should be based on performance or the results produced by an employee because this approach directly ties compensation to the employee's contributions and effectiveness in their role. When rewards are aligned with performance, it incentivizes employees to achieve specific goals, enhances productivity, and fosters a performance-driven culture. This methodology supports the idea that higher levels of effort and accomplishment should be recognized and rewarded, motivating individuals to maintain or improve their performance over time.

Focusing on performance as the basis for rewards also allows organizations to differentiate between employees, ensuring that those who contribute more significantly to the company's success receive appropriate recognition and compensation. This can lead to higher employee satisfaction, retention rates, and overall organizational effectiveness as employees feel valued for their unique contributions.