Impact of Reward & Recognition System on Virtual Team Effectiveness

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Research Background

In the current progress towards de-centralization and globalization of the work processes, many multinational firms have been responding to changing competitive landscape by introducing virtual teams in their portfolios. Under this strategy, the firms tend to form teams that comprise of geographically dispersed individuals who coordinate their tasks and communicate using information technologies (e-mails, video conferencing etc.) According to a report by AFW (2002), it was revealed on basis of survey from 376 business managers that about 20% of the managers were deployed in Germany as a part of virtual teams while 40% worked at least once temporarily in virtual teams (Hertel, Geister, & Konradt., 2005). Despite of its growing popularity, a little focus is made on motivating and managing the virtual teams using rewards & recognition systems (Bell & Kozlowski., 2002). 

For every organization, it is important to acknowledge the work of the individual to provide them assistance in terms of promoting the satisfaction of the work environment. The motivational factor impacts the performance of the workforce positively (Ebrahim, Ahmed, & Taha, 2009). This is because once the team working in the organization get to know that their hard work and the creativity are given due consideration and is well-appreciated, their productivity and the accuracy increases. The main purpose of the report is to analyze the impact of reward and the recognition system on the effectiveness of virtual teams. 

Virtual teams are defined by Bailey & Kurland (2002) as the group of people who work interdependently with shared objective across time, organizational boundaries and space by staying connected through technology. Virtual teams might be located across country or across the globe in different cultures and significantly different work environment. However, the virtual teams are different from traditional on-premises teams; still the factors like rewards & recognition can motivate them.  The factors of the appraisal system which include the reward and recognition while working with the virtual teams are important for any organization that requires their employees to work on the common goal of the organization (Ng & Tung, 2018). The employees can get motivated with financial rewards but other than this, the non-financial reward also creates a positive impact on the performance of employees (Clancy, D. K., & Collins, D. 2014). 

The virtual team or workgroup is now being developed by most of the companies to get the skilled and qualified staff from any part of the world. Most of the time the large business entities invest in the low economic countries by establishing their subsidiaries there to get the maximum advantages of the demand through their effective production capacity (Gaudes, Hamilton-Bogart, Marsh, & Robinson, 2007). Once the subsidiary of the partner company has been developed the company would prefer to hire qualified staff and skilled labor from the local economy instead of shifting the workforce from country of origin or where there headquarter is located to save the cost.

In the modern world, the increase in the advanced technology system makes it possible for the companies to manage their overseas staff significantly by using the multiple tools of information system which is used to manage and control the process (Gaan N. , 2012). The organizations now prefer to build their remote team to avoid the restriction of any particular place of work or else many key projects of the companies are being outsourced as well to save the in house cost. Various technologies can also be used to hire the employees and labor remotely (Wong & Burton, 2000). Virtual teams can also be defined as the employees working towards the common goals of a project in which the efforts made by them are collaborative. The environment provided to these employees is virtually oriented (Renfordt, 2018).

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