Reward Management types

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Reward management is a strategic approach to incentivising your workforce to improve performance, engagement and morale:

It rewards employees according to a business’s values and that they are prepared, or are able, to fund It rewards employees for the value they create and contributes to employee wellbeing Rewards the things that convey the right message about what is important in terms of behaviours and outcomes within a business

Reward management types can be identify as a financial and non financial rewards, to motivate employees and drive performance.

It contributes to a robust and uplifting corporate culture.
It improves your employee value proposition (EVP), which is what makes you stand out from other employers (your rivals) and draws top talent to your company.
It can help motivate employees and confirm their commitment to the business and engagement within it Help to retain top talented individuals to your business

  • It increases productivity
  • It helps you to build a strong reputation – this can be a key way to engage employees, contribute to a positive reputation and have a significant influence on your clients.

What do we mean by ‘reward’?


The easiest way to separate rewards is to split them into two categories: intrinsic and extrinsic. Intrinsic awards are encompassed by things such as awards, praise, and public recognition, which give a sense of achievement but are not monetised. Whilst extrinsic rewards are physically given and can involve value such as a bonus or paid holiday, for example.

Within that, they can be further divided into three sub-categories: benefits, perks, and rewards.


Financial Rewards:


Tangible and monitory: these rewards are directly related to money and can be easily quantified

1. Bonus- Paying annual bonus by considering employees attendance

2.Salary Increases- Regularly increasing basic salary, an also promotion that reflect employees contribution and performance.

3.Profit Sharing- employees receive a portion from company profit

4.Fringe benefits- additional compensation or perks beyond regular salary health insurance, paid time off, or retirement plan5.Commissions

Commissions are a very popular incentive program that is typically given to salespeople as a reward. In this situation, the employee usually receives a reduced base wage and commission compensation, which is determined by the proportion of sales they generate. In order for employees to get the financial benefits of their efforts, this kind of incentive program might motivate them to close higher-value transactions. Since commission is typically used to determine a salesperson's compensation, it's critical to manage the program to guarantee that staff members continue to use moral sales practices.

Non financial rewards 

1.Recognition and appreciation-Awards, public recognition, or thank-you cards for exceptional work.

ex: Annual gift for all employees 

 2.Flexible work arrangements include things like reduced workweeks, flexible hours, and remote employment.

3.Opportunities for Professional Development: Getting access to conferences, workshops, or training to improve abilities and expertise.
  
4.Empowerment-Giving workers greater freedom and authority to make decisions in their jobs is known as empowerment.

5.Extra Time Off: As an incentive, you may receive paid time off, personal days, or additional vacation days.

6.Positive work environment-Creating a culture of mutual respect, trust, and cooperation is the foundation of a positive work environment.

7.Social and Team Building Activities: social events, team-building exercises or company excursions.  

8.Experiential rewards are special and unforgettable events, like going to a conference or working on a special project.

Motivated and engaged workers are essential to any successful company in the cutthroat business world of today. Although giving money has long been a common way to encourage workers, it's crucial to understand how effective non-monetary awards may be in boosting productivity and engagement.

Study.com

Comments

  1. Manju Kariyawasam4 April 2025 at 05:37

    This is a well-explained and insightful write-up. You have clearly highlighted both financial and non-financial rewards and their impact on employee motivation. The practical examples make it easy to understand. Great job showing how reward management supports performance and workplace satisfaction.

    ReplyDelete
    Replies
    1. Nirmani Hansika11 April 2025 at 00:49

      Hi Manju,
      Financial and non financial rewards system directly impact for the employee motivation. This article is well-explained it.


      Delete
  2. Thivon Liyanage8 April 2025 at 00:18

    The section on types of reward management clearly distinguishes between financial and non-financial rewards. It effectively shows how both contribute to employee satisfaction and performance. In the past, organizations equated rewards mainly with money, but it’s now clear that non-monetary rewards also significantly enhance motivation and engagement.

    ReplyDelete
    Replies
    1. Nirmani Hansika11 April 2025 at 00:52

      Hi Thivon,
      In current industry management plan to give rewards as non monitory rewards. that is also very effective method in current industry.

      Delete
  3. Thiranji Samarakkody11 April 2025 at 16:02

    This article effectively highlights the importance of reward management in enhancing employee performance, engagement, and retention. It emphasizes the balance between financial and non-financial rewards, noting how both are essential for fostering a positive organizational culture and improving productivity. The focus on intrinsic rewards, such as recognition and professional development, is a valuable insight into non-monetary incentives that can significantly contribute to employee motivation and satisfaction.

    ReplyDelete
    Replies
    1. Nirmani Hansika15 April 2025 at 09:58

      Hi Thiranji,
      Highly appreciate your comment. In this article i mentioned that importance of enhancing employee performance , engagement and retention.

      Delete
  4. Nethmi13 April 2025 at 00:28

    Nirmani This is a really good start to explaining reward management. You've included main points about how rewards can improve performance and support business goals. Also explaining financial and non financial rewards adequate. we can get a valuable idea from this article.

    ReplyDelete
    Replies
    1. Nirmani Hansika15 April 2025 at 10:01

      Dear Nethmi,
      Highly appreciate your comment, In This article excellent place to start when describing reward management. I've covered the essential elements of how incentives can boost output and advance corporate objectives. providing sufficient explanations of both monetary and non-monetary benefits. The essay provides us with a useful concept.

      Delete
  5. Hiranthi Kalansooriya13 April 2025 at 08:36

    Rewards don't always have to be money. Nonfinancial rewards such as recognition, flexible work arrangements, empowerment, and clear career pathways can really motivate employees. This kind of reward system not only improves performance but also helps attract and retain top talents. Very helpful and well-explained article.

    ReplyDelete
    Replies
    1. Nirmani Hansika15 April 2025 at 10:05

      Hi Hiranthi,
      Thank you for the comment. Money isn't the only kind of reward. Employees can be greatly motivated by non-monetary benefits including empowerment, flexible work schedules, recognition, and clear career paths.

      Delete
  6. NILUSHA DISHANTHI14 April 2025 at 18:24

    That's a well articulated and insightful take on reward management. You've clearly highlighted not only the functional aspects like performance and retention but also the deeper cultural and strategic impacts it can have on a business. I especially appreciate how you emphasized aligning rewards with company values and employee well being, which is often overlooked. Your explanation captures the holistic role reward management plays in shaping both motivation and organizational identity. Great job!




    ReplyDelete
    Replies
    1. Nirmani Hansika15 April 2025 at 10:08

      Hi Nilusha,
      Highly appreciate your comment, That's a thoughtful and well-written approach to reward management. You have eloquently outlined the deeper cultural and strategic effects it can have on a company in addition to the practical elements like performance and retention.

      Delete

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