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Rewards and compensation for employees are the monetary and nonmonetary rewards that companies use in order to attract, incentivize, and retain their employees. These rewards can be both tangible and intangible; as well as affect employees directly and indirectly. Tangible rewards can be an employee’s wage or salary, bonuses, equity awards, benefits, paid time off, training and development, etc. Intangible rewards include support in the workplace, challenges to improve performance, autonomy, positive reinforcement, etc. Direct rewards are those that immediately affect the employee, whereas indirect rewards are still beneficial but are not explicit at all times. The combination of all of these is known as the total rewards approach. Determining compensation for employees is essential for employee satisfaction and productivity, and it is the responsibility of Human Resources to make sure that it also aligns with organizational goals. While achieving high employee satisfaction is a major component of rewards and compensation, it is important that such rewards do not come as a loss to the organization. Finding this balance is key.
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