Reward Power in Leadership: Definition & Example

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  • 0:01 Definition & Key Concepts
  • 1:30 Example
  • 2:21 Lesson Summary
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Lesson Transcript
Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Expert Contributor
Jerry Allison

Jerry holds a Doctor of Business Administration and a Master’s in Mathematics. He has taught business, math, and accounting for over 25 years.

In this lesson, you'll learn about reward power and its important concepts and then be provided an example to illustrate it. You'll have an opportunity to reinforce your knowledge with a short quiz after the lesson.

Definition and Key Concepts

Reward power is simply the power of a manager to give some type of reward to an employee as a means to influence the employee to act.

Rewards can be tangible or intangible. The key distinction between a tangible reward and an intangible reward is that tangible rewards are physical things, while intangible rewards are not. Examples of tangible rewards include monetary awards, wage or salary increases, bonuses, plaques, certificates, and gifts.

Intangible rewards can also be effective. Examples of intangible rewards include praise, positive feedback, recognition, more responsibility including a rise in status, and even a well-timed 'thank-you.' An obvious advantage to intangible rewards is that they can be as effective as tangible rewards and cost relatively nothing.

Reward power does have some disadvantages. Employees may be tempted to engage in unethical or illegal behavior to meet the criteria to earn the reward. For example, an unscrupulous salesman may engage in fraud to induce customers to purchase, in order to meet the production level required for a bonus. Reward power may also create competition between employees that is counter-productive, hurting teamwork and group productivity. Employees may also focus their attention away from their jobs and focus their attention on obtaining rewards, even at the cost of poor work quality. For example, members of an assembly line may work sloppily in order to work more quickly to meet production goals for an award.

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Additional Activities

Reward Power Thought Projects

Discussion Question

You are a camp counselor at Camp Hockaloogi. One of the trash bins contains rotten food and messy garbage. The camp director offers to pay someone to dig out a book that was mistakenly thrown away from the bottom of the trash bin. Would you do it for $0.50? Would you do it for $500? What dollar value is the point that determines if you would dig out or not dig out the book?

Discussion Question

The coach of the Mytown Muffs basketball team has decided to create an incentive for the players. The coach announces that for every basket a player makes in a game, that player will be given $10. What are the consequences of this reward system? How would it affect the team as a whole?

Research Project

Find several people who work at different places. Ask them the following questions:

1. What reward system(s) have you observed at work?

2. Which reward system motivates you the most?

3. Which reward system does not interest you?

4. What type of reward system would you design as an employee that would motivate you?

Internet Research Project

Use a search engine to research the various pay incentive programs. What are the strengths of each program? What are the weaknesses of each program? Write a short report in which you discuss each program, including their strengths and weaknesses. Then discuss which one you prefer and explain why.

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