Performance Based Rewards
Performance Based Rewards
Performance Based Rewards
Performance-based rewards are an incentive that employees receive based on their work-related
contributions to the company rather than their time with the company. Performance-based
rewards can take many forms, including stock options, bonuses, and salary increases.
Incentives: These are usually a fixed amount of money paid out at regular intervals,
typically monthly. Incentives are often used as part of a basic salary package but can also
be offered as an element in a total reward package. They may be tied to goals or other
performance measures.
Bonuses: These are lump sums paid in addition to base salary or wages. They generally
have more flexibility than incentives because they don't have to be linked to specific
goals or metrics.
McDonald's in Australia faces challenges in implementing its reward and incentive system due to
limited financial resources and its business strategy of cost-effective leadership, aiming to lower
its operating costs to remain competitive. This essay starts by providing an overview of the fast
food industry and McDonald's in Australia. A literature review of the use of financial and non-
financial rewards and the relationship between reward, motivation, and business outcome
follows.
McDonald's’ current reward and incentive strategy is then discussed and evaluated. It is argued
that the rewards and incentives system, both intrinsic and extrinsic has positive impacts on
employees’ performance and business results for businesses in general and McDonald's in
particular. Nonetheless, other human resource practices are also beneficial for the company.
With the change in Australian people’s lifestyles, particularly dining habits, and new job
requirements, the fast food industry in Australia has expanded rapidly since the end of the 20th
century (Lyons, 1999). Beliefs and perceptions regarding the consumption and health risks of
fast food have also been altered (Dunn, Mohr, Wilson, & Wittert, 2008). The fast food industry,
which serves foods such as burgers, pizza, sandwiches, salads, juices, desserts, and
confectionery, is characterized by a low level of capital, and labor costs constitute the majority of
daily operating costs. According to a report by IBIS World, this industry’s revenue is forecast to
achieve an annualized growth rate of 3.9% over the five years through 2016-17, to reach $19.3
billion (Fast Food Services in Australia, 2017).