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The purpose of this paper is to investigate the mediation effect of work performance and organizational commitment in the relationship between reward system and employees’ work satisfaction.

The study population constituted all employees/permanent employees (civil servants and non-civil servants) at Bank of BNI, Bank of BRI, Bank of Mandiri, and Bank of South Sulawesi. The analytical method used to test the hypothesis of the research was structural equation modeling.

Based on the analysis results, it can be concluded that the extrinsic reward system and the intrinsic reward system have a direct, significant effect on work performance and organizational commitment, and work performance and also organizational commitment have a direct, significant effect on work satisfaction. On the other hand, the extrinsic reward system and the intrinsic reward system have no direct effect on work performance, but work performance and organizational commitment as mediation variables bridge the relationship between the extrinsic reward system and the intrinsic reward system to work satisfaction.

Mediation effect (using the Sobel test) of work performance, and organizational commitment in the relationship between Reward Systems on work satisfaction, location of the study (no previous research for this relationship): Bank of South Sulawesi, Indonesia.

Teams have become a popular way to organize business because they offer companies the flexibility needed to meet the demands of the changing business environment. While many companies have been quick to organize their workforce into teams, they have not been as eager to implement team‐based compensation systems. However, if team‐based organizations continue to utilize old, individually‐oriented pay systems, they will not fully realize the benefit of highly cooperative and motivated work teams. The purpose of this two‐part article is to examine the “ideal” team compensation system. Together, both parts will review the basics of both teams and compensation and then explore the ideal team compensation system from three levels ‐ framework, critical elements, and other, operational considerations. Part I provided information through the ideal team compensation system framework. This article, Part II, looks at the critical elements and other, operational considerations.

The purpose of this study is to investigate the impact of reward systems on team performance and analyze how satisfaction with rewards can result in better working performance and cohesiveness in the job environment.

Data was collected from 32 single members of different teams working in 10 selected banks from the Middle East and North Africa region.

The analysis from empirical findings reveals that there is a positive link between reward systems and team performance. More particularly, profit sharing has positive effects on team performance and collective bargaining reward systems affect significantly team cohesiveness. These links create an opportunity for employers to use reward systems as a motivating factor to direct team behavior toward more employee retention.

This study contributes to the teamwork performance research stream by empirically studying how rewards improve team performance and cohesiveness in Eastern contexts. Studies in such contexts are relatively rare.

This review article focuses on the factors that affect the selection and implementation of three principles of distributive justice (i.e., equity, equality, and need) to reward systems in group and organizational settings. After presenting an overview of the assumptions, goals, and possible consequences associated with each of the three perspectives, the article then describes the moderating factors influencing distribution rule preferences across four levels of analysis: (1) the interorganizational, (2) the intraorganizational, (3) the work group, and (4) the individual. Some of the variables discussed include cross‐cultural differences, reward system implementation, task interdependency, work group climate, and individual characteristics. This material is then summarized through the use of a new conceptual model for describing allocation rule preferences. The article concludes with suggestions for future research.

The purpose of this paper is to investigate how the design of loan officer reward systems affects bank credit losses caused by commercial clients.

This paper uses an agent-based model to investigate how the design of reward systems affects bank credit losses. Two different systems are compared: competitive and a cooperative. The model is designed according to the theoretically derived assumption that a cooperative reward system will make agents more likely to share knowledge with each other in the processes of granting and monitoring credit.

The results show that a cooperative reward system have potential to reduce bank credit losses. The reduction of errors in evaluating company’s probability of default thus mitigates variations induced by variations in industry, region, and firm-specific returns.

The findings imply that reward system design should be considered in credit risk management. Further, managerial issues (e.g. reward systems) should be considered in risk modeling.

The results presented in this paper provide evidence to the value of considering the downside (e.g. loss) when designing reward systems in banks.

The ongoing debate about the effects of bonuses on managers’ performance and the role of reward systems in organizations has still not led to a unanimous conclusion among academics and practitioners. Those in favor of bonuses state that applying bonuses and putting emphasis on monetary rewards increases productivity and organizational performance, while those against bonuses claim that use of bonuses and monetary rewards leads to counterproductive results. A key question often overlooked in the discussion is: How important is handing out bonuses for an organization to become and stay successful for a longer period of time? This paper seeks to address these issues.

This paper describes the results of research into the characteristics of “high performance organizations” (HPOs) and the role of bonuses and reward systems in creating and maintaining HPOs.

The research results show that use of bonuses or implementation of certain types of reward systems have neither a positive nor a negative effect on organizational performance. This may be explained by the fact that reward systems are a hygiene factor for an organization. If an organization does not have an appropriate reward system (whether or not including bonuses), it will run into trouble with its employees and have difficulty improving its performance. If it does – a situation which employees expect and consider to be normal – it can start working on becoming an HPO.

The results of this study further the discussion about the role of bonuses.

This paper aims to improve customer knowledge management practices in industrial firms by examining the role of knowledge integration mechanisms (KIMs) and customer-oriented reward systems in non-marketing managers’ use of customer information.

Cross-sectional survey data were collected from 221 R & D and manufacturing managers from large, Finnish industrial companies. Ordinary least squares regression with bootstrap procedures was used to test the hypotheses.

The use of KIMs mediates the positive effect of customer-oriented reward systems on non-marketing managers’ use of customer information. However, non-marketing managers’ previous work experience in sales and marketing negatively moderates the effect of customer-oriented reward systems on the use of customer information. The use of knowledge integration systems mediates this moderation effect.

This paper provides empirical evidence concerning the antecedents of successful customer knowledge transfer from sales and marketing to R & D and manufacturing. The findings imply that non-marketing managers with T-shaped skills (previous work experience also in sales and marketing) are unlikely to increase their use of KIMs if they are exposed to customer-oriented reward systems. Hence, broadening employees’ knowledge base substitutes for using customer-oriented reward systems as a tool for improving customer information use.

Building on the research on customer knowledge management, marketing’s cross-functional relationships and the motivation for knowledge transfer, this paper increases our understanding of how to develop organizational support for customer knowledge transfer. The authors consider both the impact of reward systems and their interaction with employees’ knowledge and skills.

Reasonable remuneration of employee inventions is a controversial issue causing court litigations among employees and employers in many countries. The paper aims to shed light on the missing economic interpretation of the reasonable remuneration of employee inventions. Specifically, it focuses on the concept of “reasonability” at the issue.

In an empirical qualitative multiple case-study setting, the paper explores inductively Czech corporate employee inventors' remuneration systems, using typological analysis and M. Weber's interpretative theoretical construct of “ideal type.”

At the first level, reasonability is a function of multi-amount rewarding, a certain level of total remuneration and identifiable benefits being a decisive factor. Additionally, the reasonability is conceptualised as a function of two dimensions – timing/risk and benefit–reward relation. At the second level, the reasonability is interpreted as a concept balancing seven points of view: timing, materiality, equity, risk management, transparency, system costs and exactness. At the third level, the paper offers an optimal remuneration system like the one that optimises developed seven-criterion framework.

Even if analysed within one-country and nine-company context, the insights are generalisable across a broader sample of countries with statutory rules for employee inventions. Studying more cases may enrich the findings. The findings are based merely on a rational perspective and do not deal with psychological aspects of employees.

The results may be helpful for intellectual property or R&D managers in building or reorganising employee invention remuneration systems within corporations. The developed seven-criteria model can serve as a discussion framework; the suggested optimal system as a reference point. The results may serve as well to consultants, judges or other parties involved in currently growing employee–employer controversies and litigations. The analysis may fuel public policy decisions, too.

The paper brings unique and detailed empirical insights into the issue of employee inventions. It offers a complex multi-perspective (employee/employer) framework through which the reasonability can be discussed and suggests an optimal system, which can serve as a reference point.

Mechanisms for increasing participation of employees in problem‐solving activities such as continuous improvement (CI) programmes often include the use of problem‐solving teams. Teams can support problem solving by emphasizing accountability for the production process within the work unit, thereby increasing the sense of responsibility for (local) problems. However, it is unclear how effort within these organisational forms should be rewarded. This article describes the use of problem‐solving teams within a UK automotive component company, and examines the implications for human resource policy, in particular for the reward and recognition systems. The article outlines the outcomes that ensued when two reward systems existed, one for team‐based activities and another for individual suggestions. The contradictions of the two systems are considered in the context of the organisation’s historical individualistic approach to reward systems.

This study examines the impact of reward practices on the relationship between an organizational strategy based on the principles of total quality management (TQM) and perceptions of firm performance. Major findings include: higher levels of firm performance were significantly correlated with greater use of TQM practices, but not with greater use of quality rhetoric in either formal strategic documents or informal strategic discussions; the use of extrinsic reward practices – including profit sharing, gainsharing, employment security, and comp time – exhibited a significantly positive moderating effect on the relationship between TQM and perceived firm performance. Regarding implications for practitioners, it is insufficient to include quality rhetoric in the formal and informal strategy. As the anecdotal literature has often advocated, the current research provides empirical support that management must “walk the talk” with regard to TQM efforts. Further, in order to realize even higher levels of firm performance, an organization should utilize reward practices which specifically complement its TQM‐based strategy.