Introduction
“What’s in it for me?” Nearly every individual consciously or unconsciously asks this question before engaging in any behavior. Our knowledge of motivation and people’s behavior at work tells us that people do what they do to satisfy needs. Before they do anything, they look for a payoff or reward.
The most obvious reward employees receive from work is pay. However, rewards also include promotions, desirable work assignments, and a host of other less obvious payoffs—a smile, peer acceptance, work freedom, or a kind word of recognition. We’ll spend the majority of this chapter addressing pay as a reward as well as how organizations establish compensation programs.
Among the several ways to classify rewards, we have selected three of the most typical dichotomies: intrinsic versus extrinsic rewards, financial versus nonfinancial rewards, and performance—based versus membership-based rewards. As you will see, these categories are far from mutually exclusive, yet all share one common thread—they assist in maintaining employee commitment.