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Behavior Changes Based On Compensation

Compensation is a large part of the HR management of every company. There are two components of compensation based on our lecture, extrinsic and intrinsic rewards. The extrinsic rewards represent “the tangible, monetary and nonmonetary effects of compensation” (Lecture 1 Outline) while intrinsic rewards represent “the intangible, psychological and social effects of compensation” (Lecture 1 Outline).

The situation where I changed my behavior based on the compensation is definitely when I declined the sales/marketing position because the extrinsic rewards were not good. So, the job was paying barely a minimum wage and the workload was 40 hours a week, while there were no benefits whatsoever and no type of health plan. I declined the job offer because of the low compensation so it was mostly due to the extrinsic rewards (monetary) that were too low.

Compensation drove my behavior because of Maslow’s hierarchy of needs as I thought that my safety and physiological needs would not be satisfied (therefore, my existence could be at risk). I did not like the offer that the company proposed and I would not take it due to the low compensation. This is because I wanted to be able to live a “normal” life which could be put in jeopardy if I took the job. I wanted to be able to not worry about existence and food so that I can focus on other areas of my life that I can focus on and improve. I wanted to be able to think about the new ideas and maybe even businesses that I want to start on my own instead of focusing purely on how to survive. I think that this was a great decision and I had never regretted it.

Overall, compensation is an important factor of every employee due to different reasons but I think that it is important that it is based on merit and fairness (hopefully this could be objective) while satisfying basic human needs.

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