REWARDS MEANING & DEFINITION IN HRM
Rewards are tangible and intangible recognition given to employees by organizations for their positive contributions, achievements, and desired behaviors.
Rewards are of two main types:
- Financial rewards: These include direct compensation like salaries, wages, bonuses, commissions, and profit-sharing plans. Medical coverage, pension programs, and paid days off are examples of indirect financial rewards.
- Non-financial rewards: This category encompasses intangible forms of recognition. These include public acclaim, honors, promotions, more responsibility, workplace flexibility, and development and learning opportunities.
Benefits of effective reward systems:
- Increased employee motivation and engagement
- Improved employee performance
- Enhanced employee retention
- Improved organizational culture
Designing an effective reward system requires careful consideration of various factors:
- Organizational goals and values
- Employee needs and preferences
- Financial resources
- Communication and transparency