An intrinsic compensation system offers non-financial rewards that come from performing work, such as personal growth, job satisfaction, and a sense of meaningfulness [1] [7]. Two effects of this system towards employees are:
Increased employee engagement: Intrinsic rewards improve employee engagement, as employees find satisfaction and enjoyment in their work [2] [6]. When employees are engaged, they are more focused, committed, and likely to go above and beyond in their roles [2].
Persistence and motivation: Intrinsic rewards make employees persistent, encouraging them to remain committed to their tasks and responsibilities [6]. This motivation is personally rewarding to the individual, fostering a sense of pride and purpose in their work [1] [5].
Intrinsic compensation systems, therefore, positively impact employees by increasing their engagement and fostering persistence, making work more fulfilling and enjoyable.