The impact of tangible rewards on empowerment in the hotel sector

The need to empower employees to respond in a timely and innovative manner to customer’s requests and problems has been acknowledged as a source of competitive advantage by service managers. Hence, researchers and practitioners have proposed that empowered behaviour should be rewarded. However, research on the impact of tangible rewards on intrinsically motivated behaviour, such as empowered or discretionary behaviour, indicates that tangible rewards may not be effective. In light of the high financial and social costs of administering reward systems, it is important that service managers understand how tangible rewards impact on the behaviour of service employees. This paper presents the findings of an exploratory study of the impact of tangible reward systems on employee empowerment and the discretionary behaviour of service employees. In-depth interviews, conducted with human resource managers in three five-star hotels, indicated that while management is keen to empower their employees to deal with guest’s need and problems, they are uncertain about how to use rewards to encourage creative discretionary behaviour. Focus groups with staff from four departments of one major hotel indicated that the employees do feel empowered to satisfy guests, however while tangible rewards are appreciated, it is the praise and recognition received from guests, supervisors and peers that motivates them to ‘go the extra mile’. Further, analysis of the focus group discussions indicated that managers who are rewarded and recognised are more likely to reward and recognise the efforts of their subordinates.