Instrinsic Rewards -Great For Employee Engagement

I believe, new generation now come to workplace with different expectations, knowledge, skills and creative ideas. Employee’s turnover rate may be very high in repetitive jobs and employees prefer to work in flexible environment and respond best to work that is more meaningful in term of learning new skills, own ways to accomplishing tasks. Frederick Herzberg, who studies back in the 1960s, found that feelings of accomplishment, personal challenge, increased responsibility and belonging were among the strongest intrinsic rewards in organizations. Further, he demonstrated that intrinsic rewards are generally much stronger than extrinsic rewards.

In recent economic crisis and environment, employers are concerned about keeping employees engaged after they have suffered through wage freezes, lost bonus, increased work demands and lay off. Keeping employee engaged in such circumstances and retains talent with organization will be most challenging for compensation professional and organization.

Although a variety of definitions can be found, employee engagement is typically described as a high level of employee involvement, commitment to the organization and job satisfaction. Engaged employees value, enjoy and have pride in their work. They are more willing to help each other and the organization succeed, take additional responsibility, invest more effort in their jobs, share information with other employees and remain with the organization than employees who are less engaged.

Extrinsic and Intrinsic rewards

Extrinsic rewards usually financial and come from your boss or by managers such as pay raises, bonuses, time off, benefits. Financial rewards and their size controlled by management. Extrinsic rewards decision based on various compensation process, system, internal work culture, financial performance and business strategy of organization, market and organization ability to pay rewards. Union and government also play effective role through collective bargaining, negotiation, rules, regulation, legislations for minimum wages, benefits, time off rewards and other benefits.

Organizations are trying various rewards and compensation strategy, system, process and pay methods to motivate employees to achieve objectives like Person-based pay, grade system, market base pay, pay progression based on hours worked and certification of skills, commission, bonus, benefits and various ways to pay financial incentives. . Pay, benefits, work environment and learning and development. Work environment and opportunities of learning and development are more important than pay and benefits.

The job characteristics model identifies five core job dimensions that produce three psychological states.

Experienced meaningfulness, responsibility and knowledge of result, Employees who experience these psychological states tend to have higher level of internal work motivation, job satisfaction and work effectiveness.

Extrinsic rewards remain significant for workers, of course pay is an important consideration for the most workers in accepting a job and unfair pay can be a strong de-motivator. However, after people have taken job and issues of unfairness have been settled, Research suggests that extrinsic rewards are now less important. Performance, dedication, citizenship behaviour, creativity and day to day motivation are more driven strongly driven by intrinsic rewards.

Intrinsic rewards are psychological rewards that employees get from doing meaningful work and performing it well.Responsibility and meaningful work, challenging task fit to abilities, right to make decision, trust and no fear of punishment for honest mistakes. Exciting climate, celebration of success, required information access, positive feedback, skill recognition, collaborative climates and participatory processes are the example of intrinsic rewards.