REWARD SYSTEM

by: Divina Grace R. Librea

Objectives

After going through this lesson, you are

expected to:
1. Define what is a reward system;
2. Identify the different rewards system; and
3. Know the aims and purpose of reward
system.
 What is a Reward System?
A reward system helps to motivate
employees to achieve high quality performance.
It helps to attract and retain highly skilled
workers.
2 Types of Reward System
Extrinsic Rewards
These are rewards which pertain to money, finance,
or currency.

Intrinsic Rewards
These refer to nonmonetary rewards that are self-
granted and which have a positive psychological
effect on the employee who receives them.
Extrinsic Rewards
a.Pay / salary
b.Benefits
c.Incentives
d.Executive pay
e.Stock options
Intrinsic Rewards

a. award
b. praise
Aims and Purpose of a
Reward System
Armstrong and Murlis (2007)
● To create total reward processes that are based on
beliefs about what the organization values and wants
to achieve;
● To reward the employees for the value they have
created for the organization;
● To bring into line the reward practices with the
employee values and business goals and objectives;
● To develop the positive psychological contract and
employment relationships with the employees;
● To reward right behaviours in order to deliver the positive
message to the employees that what organization expects
from them in terms of outcomes and behaviours;
● To win the war of the talent by attracting and retaining the
talented, skilled and competent pool of employees that
organization need to make the difference;
● To gain the commitment and engagement of the
employees by motivating them through reward
practices;
● To cultivate and sustain the performance culture
within the organization.
THANK YOU!!