Group 8

Rewards
&
Recognition
 PRESENTERS:

LABRADOR, JESSAHMAE
MONTALES, JAY ANNE MARIE
YOUNG, PATRICIA LEI

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 Extrinsic Rewards

-Rewards external to the job, such as pay,

promotion, or fringe benefits.

-it is also called Tangible Rewards

- it arise from transactions between the

employer and employee and include rewards
such as pay, personal bonuses and other
benefits.

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 Extrinsic Rewards

• Financial Rewards: Salary & Wages

• Financial Rewards: Fringe Benefits

Ex. Expense for foreign travel,

Holiday and vacation expenses,
Educational assistance to the
employee or his dependents, and,
Life or health insurance and other
non-life insurance premiums or
similar amounts in excess of what the
law allows.
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 Extrinsic Rewards

• Interpersonal Rewards- receiving recognition or

being able to interact socially on job.

Ex. Public praise, expressions of a job well done

or special attention.

• Promotion - the act of raising in rank or

position

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 Intrinsic Rewards

-rewards that are part of the job itself:

The responsibility, challenge & feedback
Characteristics of the job.

-it is also called Intangible Rewards

-it is a rewards that have to do with learning,

development and work experience.
 Intrinsic Rewards

 Completion – the ability to start & finish

A project or job.

 Achievement – is a self-administered reward

Derived from reaching a challenging goal.
 Intrinsic Rewards

 Autonomy – result from the freedom to do

what the employee considers best in a particular
solution.

 Personal Growth – personal growth of any

individual is unique. Individuals experiencing such
growth can sense their development & see how
their capabilities are being expanded.
MOTIVATION = sum of the The interaction
person’s intrinsic and of intrinsic &
extrinsic sources of extrinsic
motivation rewards
 INTRINSIC EXTRINSIC MOTIVATION
REWARDS REWARDS

Basically, the person receiving self administered feelings of

satisfaction is performing because of intrinsic rewards.
Once extrinsic rewards are added, feelings of satisfaction
change because performance is now thought to be due to
the extrinsic rewards. The addition of extrinsic rewards tends
to reduce the extent to which the individual experiences self-
administered intrinsic rewards.

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 Rewards, Turnover &
Absenteeism
Merit ratings - A formal rating system
applied to employees.

Absenteeism - no matter for what reason, is a

costly and disruptive problem facing managers.
a.) costly – reduces output
b.) disruptive – requires schedules to be
modified

Presenteeism - Refers to the act of employees who

attend work but, due to illness or other medical
reasons, tend to underperform their jobs.

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• Rewards and Job
Performance
The rewards must be valued by the person, and they
must be related to a specific level of job
performance.

If valued rewards are used to motivate, they can result

in the exertion of effort to achieve high levels of
performance.

(PERFORMANCE-OUTCOME EXPECTANCY)
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 • Rewards & Organizational
Commitment

Commitment - A sense of identification, loyalty, and involvement

expressed by an employee toward the organization or unit of the
organization.

three attitudes :
 a sense of identification with the organization’s goals,
 a feeling of involvement in organizational duties, and
 a feeling of loyalty for the organization.

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• Primarily to motivate the employees to greater
performance.

• It aims to maximize the positive impact that a wide

range of rewards can have on motivation, job
engagement and organizational commitments.
Purposes of
• Recognize individuals and terms in a timely and
effective way.
a Reward
• Provide a continuum of opportunities to acknowledge
System
and recognize members of the organization.

• Recognize that each individual can make a difference.

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 A Model of Rewards
System

Rewards Objectives
Any organization reward system has three behavioral objectives:

1. Membership behavior to recruit and retain a sufficient number of

qualified workers
2. Task behavior to motivate employees to perform to the fullest
extent of their capabilities
3. Compliance behavior to encourage employees to follow
workplace rules and undertake special behaviors beneficial to the
organizations without direct supervision or instructions.

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 Why Rewards are given
• Express appreciation

• Recognize value

• Retains employee

• Compensate for taking & sharing risk

• Encourages positive attitudes & behavior

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 The Benefits of a Total Reward System

Greater impact – when different types of rewards are

combined, they will have a deep and long-lasting effect on the
motivation, commitment and engagement of employees.

Enhancing the employment relationship – total reward

appeals more to employees due to the fact that it makes
the maximum use of relational as well as transactional
rewards.

Enhancing cost-effectiveness – because total reward

communicates effectively the value of the whole reward
package, it minimizes the undervaluing of the true costs of
the packages.
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 Continuation…

Flexibility to meet individual needs – due to the variety of

rewards, the total reward is able to answer the individual
needs of the employees and hence bind them more
strongly to the organization.

Winning the war for talent – because relational reward

processes are more difficult to replace than individual pay
practices, total reward gives the organization the ability to
attract and retain talented employees by differentiating
their recruitment process and hence becoming “a great
place to work.”

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 Incentives
• a great way to reward effort and behaviors which the
organization wishes to encourage.

• something that motivates an individual to perform an

action.

If the incentive is paid in return for behavior that

contributes to the organizations goals, it will in the long
run enhance organizational effectiveness and
productivity and hence generates a positive outcome
for both employer and employee.

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 Four Reward Approaches

1. Flexible benefits - Sometimes referred to

as cafeteria style plans, flexible benefit
plans allow employees to choose
benefits from a menu of options that suit
them.

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Advantages :
• allows employees to play an active rather than a passive role
in deciding on the allocation of fringe benefits.
• employees receive the benefits of greatest personal value to
them.
• make the economic value of fringe benefits obvious to each
employee because they force employees to review all of the
Advantage &
benefits offerings as they make choices.

Disadvantage :
Disadvantage
Administration can become complex and costly. The more
employees involved, the more difficult it is to efficiently
operate the approach.

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 2. Banking time off - A reward practice of
allowing employees to build up time-off
credits for such behaviors as good
performance or attendance.

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Advantages :
Can be integrated with performance in that time-off
credits can be made contingent on performance
achievements. Advantage &
Disadvantage :
Organization needs a valid, reliable & equitable Disadvantage
performance appraisal program.

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 3. Skill-Based Pay - Wages paid at a rate
calculated and based on the skills
employees possess, display, and
develop in performing their jobs.

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Advantages :
Employees must clearly demonstrate skill before
receiving pay increases.

Disadvantage :
Advantage &
Training costs to upgrade employee skills are higher
than under conventional pay systems. Labor costs if
employees learn many skills. available. Employees may
Disadvantage
“top out.”

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 4. Gain sharing - A formula-based group
incentive plan in which employees share
in an organization’s financial gain from
improved performance.

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 Characteristics of Gain Sharing

gain sharing links a percentage of employees’ pay to

the achievement of performance goals;

a portion of the gains or rewards are shared with all

members of the gain sharing unit; and

a process is in place so that suggestions for

improving productivity can be generated, selected,
and implemented.

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Advantages :
Can enhance teamwork. Employees focus on
objectives, learn more about the organization, and may
be more productive. Advantage &
Disadvantage :
If plans focus only on productivity, employees may ignore
Disadvantage
other important objectives.

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 Steps to an effective
reward system
1st Step. Determine the Result.
-first you need to establish the end goal.

2nd Step. Establish the rules.

-for the same reason you want to clarify the end goal,
you need to make sure the compensation or reward
structure is clear and easy to understand.

3rd Step. Make the reward worth it.

-the reward needs to be worth the effort.

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 Steps to an effective
reward system

4th Step. Set a goal that is challenging, but not

impossible.
-challenges force us to perform above and
beyond what we thought possible.

5th Step. Reward on time.

-if you want your rewards system to work, give your
employees the gift of immediate gratification.

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 Steps to an effective
reward system

6th Step. Analyze the entire rewards system.

-once you’ve written down the goals you want
your team to achieve, and thought of creative
ways to tie rewards to those specific goals, you
need to think about the entire system.

7th Step. Protect against unintended consequences.

-people respond to incentives.

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 Recognition
 Recognition is any thought, word, or deed towards
making someone feel appreciated for who they are and
recognized for what they do.

 Recognition can be strategic tool for shaping

behavior and moving an organization in a desired
direction.

 Recognition is something a manager should be

doing all the time---- it’s a running dialogue with
people.

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 Employees identify recognition as one of the most effective

Why focus on
motivators

 Employees who feel that their organization values them

are more likely to value their customers

 Appreciation or praise are among the top three drivers of

Recognition?
employee motivation and engagement across a variety of
industrial and companies.

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 Types of Recognition

1. Peer Recognition

2. Formal Recognition

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 Peer Recognition

• Program design by staff

• Nominations from staff

• Award selection by committee

• Limited involvement of administration

• Awards Ceremony

• Citation, certificate and cash Formal

awards Recognition
• Luncheon
THANK
YOU!