A reward is a compensation an employee receives from an employer in exchange of the service he or she offered or in return of the work done. It is an appreciation to the tasks performed by the employees, the aim is to retain the employees, motivate them, develop their performance and make them feel valued for their contribution in an organization.
Generally, rewards are categorized in to two (2) main types which are intrinsic rewards and extrinsic rewards.
Intrinsic reward is when an individual enjoys the results of successfully completing the task, contributing to the task or attaining the goals, examples of intrinsic rewards include, recognition, job tittle, challenging work and participation. Intrinsic rewards develops internal motivation to the employees.
Extrinsic reward involves tangible or material things given to an employee to appreciate the task performed, example of extrinsic rewards are pay, bonuses, work conditions, salary and job security. Extrinsic rewards are used to motivate employees extrinsically.
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