It could be mentioned that the relationship between performance appraisal and reward has a close relationship, why so? Because performance appraisal is the basis of rewarding in both physical and non-physical form. In Maslow’s theory, the motivation needs of people are divided into 5 things, ranging from basic needs to the most complex needs, they are :
- Biological physical needs: basic needs related to food, clothing or boards.
- Security needs: health insurance, social security.
- Needs of friends: smooth communication, kinship
- Recognition Needs: Appreciation, Confidence, Respect
- Needs self-actualization: morals, challenges.
There are 2 types of awards, the first one is intrinsic rewards, it means the rewards derived from needs or trends from within oneself. The other type is extrinsic rewards, which means awards that come from outside, such as money, rank, bonus, position or reward / punishment. For extrinsic rewards, there are some example how a company usually give it to their employee, such as give them Award Plaques to show their gratitude. As custom awards, plaques itself can be formed as brass plaques, perpetual plaques, photo plaques, or even personalized plaques.
If we divided it according to the character or type of financially given, the award is divided into two types:
- Financial rewards : the financial nature
- Non-financial rewards : which are out of money or intangible
So that can be seen linkage based on, where the relationship between performance appraisal with awards is in order to meet the existing needs with the type of appreciation that suits the needs of the individual.
In other words, performance appraisals that are made must meet the rewards required by individuals both financial and financial, and reward intrinsic or extrinsic rewards. A good performance assessment should be associated with rewards that meet the specific needs of individuals or employees on the basis of financial/nonfinancial nature as well as for intrinsic and extrinsic rewards.
In the organizational aspect, the company must begin to make a form of reward linking performance appraisals. If the organization or company does not do so, then the motivation according to Maslow’s theory is not achieved and consequently becomes unhealthy for employees in the organization. Some problems may arise for the organization.