Employee Rewards: Intrinsic Vs Extrinsic
The principal purpose of a workplace reward is to increase an employee’s happiness and loyalty to your company, resulting in enhanced productivity, reduced turnover, and raised brand perception. When most people think of workplace rewards, they often only think of a raise or a holiday bonus, however this is only one type of reward. In fact, there is a wide variety of ways to reward your employees.
Intrinsic Vs. Extrinsic Rewards:
This is the satisfactions a person gets from the job itself, such as having pride in your work, showing personal growth, feeling respected by management, being part of a team, or working for a company who ethos aligns with your own. Typically, these types of rewards come from an inside source–the employee him/herself.
Job Perks & Freedom
An employer can help cultivate these feelings by offering job perks and greater freedom, like flex time, job rotation, shorter work weeks, interesting projects, and more.
Praise / Recognition
Employees who receive words of appreciation from management or employers are happier than those who don’t. Sounds simple and obvious, right? But many workplaces don’t actually do this! Everyone wants to receive recognition for their hard work. This kind of reward can either be formal, such as an official workplace meeting, or informal, whereas an employer merely thanks or congratulates the employer in pasing with a “pat on the back.”
Taking Pride in The Job
People feel proud to do a good job at work. This feeling plays an important role in employee motivation.
An employee needs to feel that their employer trusts them and believes they can handle responsibility. Managers delegating tasks to employees is one way this takes place. This empowerment to make decisions and take actions will not only improve workplace relationships, but morale as well.
Extrinsic rewards are concrete rewards that employees receive, external to the job, and come from an outside source, such as management. Extrinsic rewards include things like money, promotions, and fringe benefits.
A gift is a short-term reward typically given as a marker of employee achievement or for helping the organization reach a desired goal. A popular way of giving out a gift is via a gift card, which will typically be used for personal or luxury purposes, and helps to reinforce the employer-employee bond.
Usually awarded annually, a bonus is a lump sum, short-term monetary reward. How an employee is appraised for a bonus differs between organizations; some companies guarantee fixed bonuses after a set amount of time with the company, or at a specific time of the year. Others base it on performance, which is subjective, and can lead to feelings of bias among employees if not carefully handled.
Wage Increase / Salary Raise
This is a long-term reward that sees the employee gain an increase in their hourly wage or yearly salary. Similar to a bonus, these increases are either given out after a set period of time, or for a particularly impressive performance or set of new skills.
This often goes hand-in-hand with an increase in salary or wages (although the same is not necessarily true in reverse). A promotion is the action of raising someone to a higher position or rank. It is important for the long-term satisfaction of an employee that this goal be achievable. The employee is motivated by this type of reward to work hard to gain the approval and trust of management in order to acquire more responsibility and seniority.
Profit sharing will motivate employees to become invested in the company’s long-term success, rather than just focused on their own salary/income.
Fringe benefits include things outside of salary, such as a company car, health insurance, pension plan, etc.
An employee spends most of their daily hours at the workplace, so it needs to be comfortable. New furniture, air conditioning, updated computers, and clean washrooms can all contribute to motivated employees.
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