Rewards and Punishments in the Workplace

Reward and encourage high performance levels.
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A workplace has a collection of different personality types, some of which respond to incentives while others respond to a fear of punishment. A good manager understands the dynamics of individual employees and creates an environment that recognizes exceptional performance. He or she will also take note of substandard performance and deal with it in an appropriate manner. While many incentives are geared toward earnings, also consider incentives for non-sales staffers.


    An incentive is a promise of a reward that can be attained by achieving a certain outcome. Incentives are often used to generate sales, encourage timely project completion or maintenance of a budget. Rewards may be given to individuals or be dependent on collaborative group performance. You may have ongoing incentives. It is also common to have incentives to reach bi-annual and annual goals. To be effective, incentives must be worthwhile, clearly defined and attainable.

Types of Rewards

    Savvy managers ask their employees what kinds of rewards will motivate them and accordingly tailor incentive plans. Some staffers prefer cash rewards, while others appreciate paid time off, flexible scheduling or deep discounts on the purchase of the company's products and services. Rewards can be based on the size of the company's budget. For example, a large company might host an annual cruise if staffers collectively reach a corporate goal, whereas a smaller business might distribute gourmet coffee gift cards to top performers at the end of each month.


    Workplace punishment is more accurately defined as “disciplinary action.” To be effective, employees must have a clear understanding of workplace policies and guidelines so that they are aware of the penalty for breaching rules or failing to meet performance standards. If employees are unfamiliar with what constitutes a violation of company rules, it can be difficult to enforce standards or take disciplinary measures without facing backlash. Have a written policy that details expectations and the resulting intervention and action that’s taken if rules are violated.

Types of Discipline

    Workplace discipline typically involves a progressive system based on the actions or inactions of staff members. For example, a significant violation, such as theft, harassment or assault, typically warrants immediate termination and even referral to the appropriate authorities. Habitual tardiness, failure to achieve goals or poor teamwork and attitudes are typically handled with a lesser extent of discipline. You might begin with individual performance counseling, followed by probation, suspension and ultimately termination.

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