Program: Human Resources Management
Audience: Current and potential HR students, compensation clerks
Method: Compare and Contrast
There are two types of rewards available in organizations: extrinsic and intrinsic rewards. These two rewards satisfy an employee’s needs. Rewards are important to employees within all organizations, so knowing the similarities and differences can help employers reward fairly and accurately. Extrinsic rewards satisfy basic human needs for survival, security, social, and recognition. In other words, it is the job context. An example of an extrinsic reward is employee’s salary. In contrast, intrinsic rewards satisfy higher-level human need such as self-esteem, achievement, growth, and development. Unlike extrinsic rewards, the factors derive from the job content. An example of intrinsic reward is providing meaningful feedback. It is important for employers to distinguish the differences between the rewards, and if utilized effectively, each can produce important benefits for the organization.