Abstract
In today"s workplace, most organizations use rewards as a tool to enhance performance and promote employee motivation. However, the debate over the effectiveness of differentiation in reward continues, with existing studies focusing on the comparative advantages of individual and group incentives in such differential rewards. As a result, little is known about how to balance these two incentives to maximize their benefits. Drawing on the optimal uniqueness theory, we propose that balancing the proportion of individual and group incentives has a positive effect on employee motivation and performance. Specifically, when the proportion of individual-based and group-based incentives is balanced, employees can maintain both personal and social identities, which in turn satisfies their personal and social needs. To verify these theoretical discussions, we used the Human Capital Corporate Panel survey data collected by the Korea Vocational Competency Research Institute. We found that organizations that maintain a balanced proportion of individual and group incentives have a positive effect on organizational communication perceived by employees, which in turn has a positive impact on overall work satisfaction. Furthermore, the study also found that the indirect effect of a balanced incentive system on work satisfaction occurs through organizational communication. Theoretical and practical implications are discussed.
Published Version
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