Remuneration can be referred to a payment or reward for work done. [1] It is generally used as a motivation to arouse enthusiasm and persistence to pursue a certain course of individual’s action. It can lead to behaviours that result in high performance within a team or an organisation. Rewards can be intrinsic or extrinsic, system-wide or individual. The below diagram illustrates the categories of rewards, combining intrinsic and extrinsic rewards with those applied system-wide or individually.

Figure 1: Examples of Intrinsic and Extrinsic Rewards

Intrinsic rewards are the internal satisfactions a person feels in the process of performing a particular action. Solving a problem to benefit others may fulfil a personal mission, or the completion of a complex task may give a pleasant feeling of accomplishment. An intrinsic reward is internal and under the control of the individual, such as the choice to engage in task behaviours to satisfy a need for competency and self-determination. On the other hand, extrinsic rewards are given by another person, typically a supervisor, and include promotions and increased pay. Because they originate externally as a result of pleasing others, extrinsic rewards compel individuals to engage in a task behaviour for an outside source that provides what they need, such as money to survive in modern society.

Rewards can be given system-wide or individual. System-wide rewards apply in the same way to all people within a team or within an organisation. Individual rewards may differ among people within the same organisation or team. An extrinsic, system-wide reward could be health benefits or extra holidays made available to the entire organisation or to a specific category of employees, such as those who have been with the organisation for two years or more. An intrinsic, system-wide reward would be the sense of pride that comes from contributing to a winning organisation. An extrinsic, individual reward is a promotion or a bonus. An intrinsic, individual reward would be the sense of personal fulfillment that an individual derives from his or her work. [2]


[1] Redgoldfish 2009, Remuneration, accessed on 6 May 2009,

[2] Daft, R and Pirola-Merlo, M 2009, The Leadership Experience, Cengage Learning Australia, Victoria.