Linking pay to performance

Rewards and recognition integrate total pay with a compelling future, individual growth, and a positive workplace to create a win-win partnership between the company and its employees that enhances effectiveness and advances overall business objectives. Organizations need competent individuals who in return for their commitment expect certain extrinsic and intrinsic rewards. These rewards and recognition are based on philosophies and strategies and contain arrangements in the shape of policies, practices, structures and procedures which are designed and managed to provide and maintain pay, benefits and other forms of reward.

Reward and recognition is not always monetary. It is also concerned with non-monetary rewards, which provide intrinsic or extrinsic motivation. Intrinsic motivation is achieved by satisfying individual needs for achievement, responsibility, challenge, influence in decision making, personal growth, meaningful contribution, etc. Extrinsic non-monetary motivation is achieved by recognition, skill development, learning and career opportunities while extrinsic financial motivation is achieved through salary, fringe benefits, and perquisites, bonuses or stock options.