Reward Systems in the Post Digitization Era: Possible Benefits and Risks

Abstract

The last decades have been characterized by extremely intense digitization — in the shape of investments in administrative and embedded IT together with advanced Internet solutions — as regards companies and organizations worldwide. Today, however, most establishments are already highly digitized, which affects the conditions for work and organizations' forms and functions. Thus, based on an empirical investigation of the health care sector, this paper addresses the notion of the post digitization era through specifically examining IT‑based reward systems. This, of course, is not a novel phenomenon, but new ways of using the reward system concept — together with IT and original ideas — in order to increase efficiency, effectiveness, and productivity are considered. This, in turn, might have great implications concerning core strategies and the organization of work. In order to fulfill the paper's purpose of identifying possible benefits and risks associated with digital reward systems, especially in health care, a case study built on semi‑structured interviews was performed. The findings of this study indicate that there are several possible fields of innovative application — including both developments of existing solutions and potential future utilizations — concerning digital reward systems in health care. Moreover, in order for reward system implementations to be successful, organizations have to define, measure, valuate and evaluate input, output and performance appropriately, and the process of doing so is also affected by the present stage of digitization. This too is contemplated throughout the paper. Finally, important associated matters such as risk‑ reward trade‑offs and quantity versus quality are discussed. The results presented in this paper are based on a limited material. Still, they are valuable and original because of the empirical foundation derived from an important industrysector. Furthermore, they illustrate modern implications of reward systems in highly digitized contexts, and put forth novel views on possible fields of application of IT‑based reward systems, and associated potential benefits and risks.