Source: Okwudili (2016) PhD Class Note. Fig. 1: Basic Typology of Compensation
The Effect of Compensation on Employee Performance in Nigeria Civil Service: A Study of River … 11
in the way and manner human resource managers can handle compensation to the digital age worker compare to the analogue age worker. Come to think of it, since the replacement of typewriting machine with computers in the Nigeria civil service, allowances like hazard allowance, workload allowance, to mentioned but a few has become an issue between the civil servants and their employers. This is the reasons why Okwudili (2016) argues that “instead of keeping the money of civil servants in the pension scheme, it should be given to workers to enjoy it while they are still alive”. Byars and Rue (2008) typology of compensation include; paid vacations; paid holidays; social security; workers’ compensation; retirement plans; other benefits like purchase discounts are normally attractive to employees of an airline or retail store.
Nevertheless, in Okwudili’s (2016) PhD human resources management lecture, he outlined the following as the basic typology of compensation obtainable within the Nigerian work settingsas depicted in Fig. 1.
From Fig. 1, it could be seen that extrinsic reward which is the same thing as direct compensation covers monetary aspect of compensation which comprises of base pay (salary/ wages); incentives (bonuses, profit sharing, stock options). The intrinsic rewards is also the same thing with indirect compensation which include working conditions, interesting jobs, promotion, job design, career development, etc.
These are benefits derived directly from employment and the performance of work, which can be seen and quantified. It is typically given by an outside agent (i.e. the organisation). Examples are financial, material, and social rewards. Extrinsic rewards can be classified into monetised and perquisite (benefits) rewards.
Monetised rewards: These are financial rewards that are paid by organisations to compensate employees for their efforts. These include base pay, wages, incentives (bonus plan, commissions, profit sharing plans, stock options, employee stock ownership plans).