Chapter 5: Staffing

Types of Reward:

Monetary Rewards – rewards which pertain to money, finance, or currency.

a. pay/salary – financial remuneration given in exchange for work performance that will help the organization attain its goals; examples: weekly, monthly, or hourly pay, piecework compensation, etc.

b. benefits – indirect forms of compensation given to employees/workers for the purpose of improving the quality of their work and personal lives; health care benefits, retirement benefits, educational benefits, and others are examples of these

c. incentives – rewards that are based upon a pay-for-performance philosophy; it establishes a baseline performance level that employees or groups of employees must reach in order to be given such reward or payment; examples: bonuses, merit pay, sales incentives, etc.

d. executive pay – a compensation package for executives of organizations which consists of five components: basic salary, bonuses, stock plans, benefits, and perquisites

e. stock options – are plans that grant employees the right to buy a specific number of shares of the organization’s stock at a guaranteed price during a selected period of time

Types of non-monetary Reward:

- rewards which do not pertain to money, finance, or currency; refer to intrinsic rewards that are self-granted and which have a positive psychological effect on the employee who receives them.

a. award – nonmonetary reward that may be given to individual employees or groups/teams for meritorious service or outstanding performance; trophies, medals, or certificates of recognition may be given instead of cash or extrinsic rewards

b. praise – a form of nonmonetary, intrinsic reward given by superiors to their subordinates when they express oral or verbal appreciation for excellent job performance

Definition of Terms

Reward – gift, prize or recompense for merit, service or achievement, which may have a motivating effect on the employee

Monetary reward – refers to money, finance or currency reward
Non-monetary reward – refers to intrinsic rewards which do not pertain to money or finance