HRM

Financial and Non-financial Rewards

Financial

Meaning Advantages Disadvantages

Salary Regular fixed Job security Employees might
payment to staff not be
produc:ve
Wage (4me based) Employee is paid per Working over:me -> Employees might
hour of work extra money work slower since
they can receive
more money for
working over :me
Wage (piece rate) Employee is paid per Employee more Workers might focus
unit of output produc:ve -> on quantality rather
rewards than quality
Commission Employees are paid Workers will try to External factors are
with respect to their achieve the best affec:ng sales
sales results sales -> high rewards
Profit-related pay Income of employee Mo:va:on for Also, external factors
depends on workforce affec:ng profit of
profitability of the company
company
Performance related Rewards employees Its fair towards Can be stressful for
pay (PRP) who meet certain others workers
goals
Fringe payments Financial benefits to Loyal employees Expensive
employees in
addi:on to their
wage or salary >
housing allowance,
insurance

Non- financial rewards

Meaning
Empowerment Managers giving employees more
responsibility, involving in decision making
Teamwork PuKng employees in groups, and they work
collabora:vely
Job enrichment Giving employees more work
Job rota4on Employees changing jobs and tasks from
:me to :me
Purpose, opportunity to make difference Hire employees that want to make
difference and value social objec:ves
Job enlargement Tasks are added into their work role