| Summary: | Purpose: To examine how rewards affect employee motivation and performance. The study also examines how rewards affect individual well-being and company growth. Theory: The theoretical framework applied in the study is intended to answer the research questions and purpose of the study. Theories that have been used are Principal-Agent theory, Stewardship Theory, Scientific Management, theories about motivation and reward system theories. Methodology: A cross-sectional design with deductive approach has been applied. Primary data are taken from a quantitative survey from an employee perspective and interviews from a management perspective. The quantitative data are analyzed using a hypothesis testing. Results: The results showed that the fixed monthly salaries was the most common rewards of use, followed by other monetary rewards such as retirement and wellness programs. The rewards that was considered to be the biggest motivation factor was bonus followed by fixed salaries. Employee performance determines how well the company is going to perform. Analysis: The reward system must be properly designed to foster the company's objectives and the management need to be aware of in what way employees want to be rewarded. This will reduce the agency costs and the employees will work in the company's interest. Conclusion: The purpose of the award is to motivate employees to perform in the interest of the company. The reward system should be well designed and it is important to understand what motivates employees to maximize their performance. Rewards contribute to increase the individual performance wich also will intrease the company's overall performance.
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