Reward

Posted in Human Resource Terms, Total Reads: 191
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Definition: Reward

Reward is an incentive plan to reinforce the desirable behavior of workers or employers and in return for their service to the organization. Rewards can be monetary in the form of salary or non monetary in the form of awards for some special services to the company or simply giving an employee a work which he enjoys doing. The primary objective of organizations in giving rewards is to attract, maintain and retain efficient, high performing and motivated employees.


There can be various types of rewards an organization can give its employees like money, grade, performance based incentive or performance pay, increment, gift cards, recognition or awards, profit sharing, holiday packages, medical coverage, promotion, bonuses etc. Rewards are given mainly to appreciate the performance of employees and to motivate them. This is because motivated workers lead to higher productivity and the organization as a whole prospers. On the other hand if workers are unmotivated they can lead to the failure of the organization by disrupting and de-motivating other workers as well. Rewards are considered separate from salary but they may be monetary and have a cost to company. Rewards are generally aligned to organizational goals, when an employee helps the organization to achieve any of its organizational goals he/she is rewarded.


Rewards can be of two types- Intrinsic and extrinsic rewards.

Intrinsic rewards are rewards which satisfy an employee internally. Only money is not enough to motivate people and it is important to make people realize their contribution to the organization matters. That motivates employees internally. Intrinsic rewards can be giving meaningful work to employees, giving autonomy to employees, allowing employees to take responsibility in areas of their expertise and provide developmental opportunities to employees

Extrinsic rewards unlike intrinsic rewards are mostly tangible rewards like pay, advancement, recognition, time off etc.

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