PERFORMANCE AND

COMPENSATION
MANAGEMENT

Assignment

REWARD
MANAGEMENT

Submitted by- Priya Chauhan

BBA 6th semester
Section- B
 What is reward management?
Reward management is concerned with the formulation
and implementation of strategies and policies that aim to
reward people fairly, equitably and consistently in
accordance with their value to the organization.
According to Michael Armstrong, “reward management
deals with the strategies, policies and processes required
to ensure that the contribution of the people to the
organization is recognized by both financial and non-
financial means.” The main objective of reward
management is to attract and retain skilled manpower,
maximize productivity, achieve organizational goals and
ultimately, support for job satisfaction among employees.
Aims of Reward
 Consideration of values
 Fulfil common goals
 Focus on behavior and outcomes
 Attract and retain quality employees
 Motivate employees
 High performance culture
What are the types of reward management?
1.Intrinsic rewards- Intrinsic reward are the
personal satisfaction of employees derived
directly from their jobs. It is related with job
content. Intrinsic reward focuses on job
satisfaction high level of motivation of
employees.
 Achievement
 Involvement
 Independency
 Participation
 Self-responsibility
 Facing challenges
 Self-development
2.Extrinsic rewards- Extrinsic reward are direct
indirect financial and non-financial reward that
are external to the job and come from outside
source mainly management. It is related with job
context. Extrinsic reward focuses on optimum
use of human resource, maximize productivity
and achieve predetermined objective.
 Pay
 Fringe benefits
 Job security
 Good working environment
 Supportive supervision
 Status, recognition
 Praise, Promotion
3.Non-Financial rewards- Non financial rewards
are non-monetary incentives created to add
 attraction to life on the job. They are intangible
and fulfill psychological need of employees.
 Achievement
 Recognition
 Praise
 Respect
 Affiliation
 Independency
4. Financial reward- Financial rewards are
monetary rewards in order to enhance
employee’s financial wellbeing. They are
tangible and fulfill financial need of employees.
 Pay
 Allowance
 Bonus
 Piece rate system
 Retirement benefits
 Prize, awards
5. Performance based rewards- Performance
based reward are strategy to provide reward to
employees on the basis of their performance. It
means employees having high level of
performance would get better incentives vice
versa. It implies incentives in terms of piece rate
wage, commission on sales, bonus on high
production, share of profit etc. Performance
based reward encourage competition between
employees and may even lead to conflicting
priorities.
 Pay
 Bonuses
  Promotion
6.Membership rewards- Membership based reward
are strategy to provide reward to employees on the
basis of team performance. Every member of a team is
equally rewarded in terms of incentives. It implies
incentives such as profit sharing, bonus, merit benefits,
skills incentives and so on. Team encourage
collaboration and cooperation to achieve shares and
goals. Created to achieve synergetic effect from team
members.