What is the Purpose of Employee Rewards in an Organization

Nafa Lightyani

What is the Purpose of Employee Rewards in an Organization

Rancakmedia.com – Do you know what the purpose of employee appreciation is in an organization? If you don't know yet, you can read the article we have provided below.

Awards are a form of appreciation or payment given to a person or group for behaving well, making a profit or achievement, making a contribution, or effectively carrying out assigned work in accordance with the stated goals.

The English word “award” refers to a reward, honor, or reward. Every business uses various rewards and incentives to attract and retain employees and encourage you to achieve your own and the organization's goals.

The amount of awards given varies in various aspects, largely influenced by the level of performance achieved.

Rewarding workers for your worth involves all aspects of an organization's operations, from the people and processes that go into it to the rules and procedures that govern you and the decision making that goes into it.

People are motivated by economic incentives or material incentives or economic benefits at a particular time, but rewards are not always based on money (economic rewards).

Understanding Awards According to Experts

The following is a definition and definitions award from various literary sources:

  1. According to Arikunto (1993), “award” refers to something given to the recipient because you have completed or exceeded a goal.
  2. According to Djamarah (2008), gratitude is giving something to someone else as appreciation or a memento/souvenir.
  3. According to Sastrohadiwiryo (2009), awards are remuneration given by companies to employees because these workers have contributed energy and thoughts to the success of the company in order to meet the goals that have been set.
  4. According to Leman (2000), an award is something given to a person or organization if you achieve excellence in a particular subject.
  5. According to Slameto (2010) an award is an award given by a teacher to a student as a reward because the student has behaved well and has succeeded in carrying out the responsibilities given by the teacher successfully.
  6. According to Purwanto (2011), awards function as a teaching tool because you encourage children to be proud of your achievements and feel good about yourself as a result.

Function and Purpose of Employee Awards

Providing rewards has the effect of increasing intrinsic motivation over extrinsic incentives, meaning that a person must perform an activity before that action arises from that person's knowledge.

Since gratitude is a big part of loving others, giving credit to others for your accomplishments is intended to improve relationships between colleagues and subordinates and between teachers and students.

According to Gibson et al (1997), the purpose of giving awards is as follows:

  1. Bring in new (interesting) clients. Awards must be able to attract competent people to become members of the organization.
  2. Retain (retain) The second aim of this award is to prevent competitors from poaching. A good and attractive reward system can limit the number of workers who quit.
  3. Motivate (motivate). When employees have a good reward system, you are more likely to try to do a better job.

According to Handoko (2000), there are many functions of awards, namely:

  1. Strengthen motivation to push yourself to achieve achievements.
  2. Send a message to someone more skilled by making a sign.
  3. Universal.

Types of awards

According to Mahsun (2006) says that awards can be divided into two groups based on what they are intended to do:

1. Social Recognition

Praise and self-recognition received from within and outside the organization are both considered forms of social appreciation.

Social rewards are aspects of extrinsic rewards obtained from your environment. This social award can be in the form of money or a certificate of appreciation.

2. Rewards from the Hereafter (Psychic Rewards)

Self-esteem, self-satisfaction, and pride in one's accomplishments are all related to psychological rewards.

Employees receive praise, praise, and congratulations as a form of recognition of your own appreciation and to make you feel good about yourself, which are examples of psychological rewards.

According to Djamarah (2008) there are four types of gifts, depending on how they are given:

3. Praise

Praise is one of the simplest gestures of gratitude. Words such as “good”, “very good”, “very good”, and so on can be used to express praise.

Apart from words, praise can also take the form of gestures or gestures, such as raising a thumb, patting a student on the shoulder, clapping their hands, and so on.

4. Respect

One form of award is a coronation, where the child who receives the honor is proclaimed and displayed in front of classmates, school, or even the student's parents. Another form of appreciation is a plaque.

Second, students are shown respect by being given the authority to act; for example, students who achieve the best scores on practice questions are named the forming group.

5. Gifts

In this context, the form of “gift” refers to awards consisting of tangible objects.

Awards given can be in the form of school tools, such as pencils, rulers, books, erasers, and so on. Material awards are another term for awards in the form of gifts.

6. Sign of Appreciation

Awards in the form of thanks are also called symbolic awards. Appreciation tokens are not valued in terms of the price and use of goods, but are symbols of appreciation, which are assessed in terms of their impression or use value.

Meanwhile, according to Ivancevich et al. (2006), rewards are divided into two types, namely extrinsic rewards and intrinsic rewards. The explanation of the two prizes is as follows:

1. Extrinsic Rewards (Extrinsic Rewards)

Extrinsic rewards are rewards that come from outside the individual. Extrinsic rewards are divided into two types, namely:

1. Financial Rewards

The following are financial awards, consisting of:

1. Income and Salary

Salary is remuneration in the form of money received by workers as a result of their position as employees who contribute their energy and ideas to achieve company goals.

Or it can be expressed as a set of fees paid by someone from a company. Wages are monetary rewards based on the number of hours worked, the number of commodities produced, or the number of services provided.

2. Employee Benefits

Such as pensions, hospital and holiday pay. In general, this is something that is not tied to employee performance but is based on seniority or attendance record.

Bonuses or incentives Bonuses or incentives are extra rewards above and beyond the salary or wages provided by the organization.

2. Non-Financial Rewards

The following are non-financial awards, consisting of:

Interpersonal rewards, or commonly referred to as interpersonal rewards, have a variety of abilities to provide interpersonal rewards, including prestige and recognition.

1. Promotion

To ensure that the best employees are promoted to the best positions, supervisors use promotional gifts as a tool. Promotional awards are often based on performance, especially when that performance is reliably monitored.

2. Intrinsic Rewards

Intrinsic rewards are self-regulated rewards. This award is divided into several types, namely:

1. Completion

The capacity to initiate and complete tasks or activities is essential for certain individuals. Such people place a high priority on “task accomplishment,” as you put it.

Some individuals have a desire to complete tasks, and the consequences of completing an activity for an individual are a form of self-esteem.

2. Achievement

When someone succeeds in a difficult award, you are rewarded inside with the feeling of having achieved something.

3. Autonomy (Autonomy)

Some individuals seek positions where you can make your own judgments and are not constantly being monitored. When given the freedom to pursue what you do best, workers can develop a sense of self-determination.

4. Personal Growth (Personal Growth)

Each person's personal development is a unique experience. This kind of growth allows one to witness and feel the evolution of your own talents.

Some people will be unhappy with your job and organization if you are not given opportunities or encouraged to improve your skills.

Rewards Terms and System

A good reward system can encourage individuals and satisfy you so that you can develop devotion to the organization.

Low-quality rewards often fail to inspire employees to work harder and achieve greater productivity feats.

Even though a lot of money and time is put into reward programs, they rarely have the effect on employee morale that is expected.


Awards are a form of appreciation or payment given to a person or group for behaving well, making a profit or achievement, making a contribution, or effectively carrying out assigned work in accordance with the stated goals.

That is the information about what is the purpose of employee appreciation in an organization, hopefully the article above can be useful and helpful to all of you.

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Nafa Lightyani

I am a content writer for SEO, Technology, Finance, Travel, Cooking Recipes and others. I hope this can be useful for all my friends.