Types of rewards

Reward is a gift or compensation given to an employee for the best performance he or she offered in a job. There are several reasons for why organizations rewarding their employees including improving performance, reducing absenteeism and retaining employees. If rewards are not offered at the workplace, means the organization lack the catalysts or the boosters for goal achievements. Rewards are there to motivate workers, to attract or convincing them to perform their tasks at best level which results to the increase in productivity in a business or organization.

There are various types of rewards as explained below, however, in the concept of motivation the main types are two, intrinsic and extrinsic reward.

Intrinsic reward

Intrinsic reward comes from within an employee, whereby he or she enjoys the results of successfully completing the task, contributing to the task or attaining his or her goals. Intrinsic rewards are intangible for example praise, recognition, job tittle, challenging work and participation.

Extrinsic reward

Extrinsic reward is an external reward given to an employee as an appreciation of a job he or she performed. They're mostly tangible, for example, bonuses, pay, and gifts. Extrinsic rewards motivate employees extrinsically and is suitable when employees are assigned tasks which they're not interested in or when are assigned a complex task that should be performed in a short time.

Monetary reward

Monetary reward also known as financial reward, is any thing which has monetary value given to an employee to appreciate his or her best performance or simply it is a reward with monetary value, for example bonuses and commission. Monetary reward are tangible and they motivate a worker extrinsically.

Non monetary reward

Non monetary reward is a reward which has no monetary value. They can be tangible or intangible, they can also be intrinsic or extrinsic, for example, awards, certificates, praise, vehicle allowance and flexible time schedule. Non monetary rewards are affordable by almost every organization since they don't cost as much as monetary rewards.

Tangible reward

Tangible reward is a reward which can be touched, seen and quantified, for example bonus, gift card and salary increase. They're physical or material things (which may have monetary value or not) given to an employee to show appreciation for the work done or the performance. Tangible rewards are used as external motivators toward improving employees performance.

Intangible reward

Intangible reward is a reward which is not physical, it can't be touched, seen and quantified, for example praise and fame. Most of them are intrinsic motivators.

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