The reward system includes the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded. An organisation's primary purpose in giving rewards is to influence employee behaviour. . Edward Lawler describes four major generalisations about employee attitudes toward rewards. . Employee satisfaction is influenced by how much individuals think they should receive and how much they do receive. . Employee satisfaction is affected by comparison of the rewards they receive with those received by others. .
Employees often misperceive the rewards received by others. .
The system recognises that different people have different needs and choose different ways to satisfy those needs. . Fixed rewards can be tied directly to performance through merit pay systems, whereby people get different pay raises at the end of the year, depending on their overall job performance. Many organisations are experimenting with various kinds of incentive systems, which attempt to reward employees in proportion to their accomplishments. Four popular incentive systems include profit sharing, gain sharing, lumpsum bonuses, and pay for knowledge. Three motivational interventions are behaviour modification, the modified workweek, and work redesign. .