Question

Compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs. Together, both intrinsic and extrinsic compensation describe a company's total compensation system. Describe both types of rewards, listing three examples for each, and indicate the professionals who are responsible for managing them.

Answer 1

Intrinsic rewards are those rewards that are obtained by the individual and it facilitates that individual a psychological satisfaction such as a personal accomplishment, professional growth, pleasure.

The extrinsic rewards are more related to the materialistic rewards and these are used to fulfill the physical demands of the individual such as money.

Example of intrinsic rewards= Satisfaction, Autonomy on the job, Recognitions by the management

Example of extrinsic rewards= Money, Social status, Employee benefits or promotion

These are the HR managers who are responsible to develop the different types of rewards depending on the type of reward that motivates a person. It is important for HR managers to understand whether the targeted individual is motivated by intrinsic rewards or extrinsic rewards as different individuals have different preferences.