Welcome
Dear students, Welcome to my class on Commerce...
LEARNING OUTCOMES
1. The learner shall be able to identify the meaning of incentives
2. The learner shall be able to explain the types of incentives
NOTES
INCENTIVES
Incentive in simple terms is something that encourages a
person or organization to do or achieve something. Incentives can be said as a strategy of the
company to encourage the employees to work better. With the attraction of the incentives,
the employees achieve the organizational goal in the process. An employee
incentive is any program or reward introduced in the workplace to encourage
employee performance and stimulate productivity. It can be financial incentives
and Non financial incentives.
1.Financial Incentives
Companies provide Financial Incentives or monetary benefits
to their employees both as a motivation and as a reward. It is an essential
role in satisfying social/security and physiological needs. If employees
perform well, then the organization gives them a reward as an appreciation for
their efforts. And when the employee needs an added reason to give their best
efforts, the company promises extra benefits in case they complete a particular
task. Some of the common Financial Incentives are in the form of bonuses,
increments, profit sharing and periodic hikes in the wages or salaries of
employees.
Types of financial Incentives
1.
Salary – It is the basic Financial Incentive for
any employee to work diligently for the organization. It includes components
like basic pay, house rent allowance, dearness allowance and other such
benefits.
2.
Bonus – It is a consolidated amount that an
employee gets from the organization for performing well. It can act as a
powerful motivator for the employee. The bonus can also be for specific
occasions like festivals or other important events for the company. The bonus
can be in the form of monetary benefits, paid vacations, gifts, etc.
3.
Performance-based incentives – Employees may
also get increments based on their performance apart from the yearly hike on
basic pay. It can motivate the employee to keep improving their efficiency.
4.
Stock options – Firms can offer ordinary shares
to employees at rates below the market price. These shares can act as a
motivator for employees by making them part owners of the company.
2. Non financial incentives
Employees also have non-monetary needs be it psychological,
emotional or social. They need to fulfil these needs within the job or else
they may leave it for better opportunities elsewhere. It is important that any
company focuses on them as well while they provide financial perks to their
workers. The Non-Financial Incentives take care of these needs to motivate
employees to perform better in their roles.
1.
Appreciation – Giving due recognition for an
employee’s work encourages them to be more diligent and dedicated towards their
job. It gives a fillip to their self-esteem and motivates them. Companies have
employee recognition programs where Organizations must use both Financial and
Non-Financial Incentives to motivate their employees to ensure better
performance from them in the long run. It empowers them to serve their company
in the best possible manner and improve their career prospects for the future.
declare the best performers from time to time.
2.
Promotion – An employee’s current designation
reflects their position in the organizational chart. It determines their level
of responsibility and authority, salary, bonus and other benefits. To keep an
employee motivated, companies can promote them to improve their standing in the
organization and encourage them to continue their good work.
3.
Career opportunities – Companies can provide
career development programs for their employees to give them a chance to learn new
skills. These skills can help them apply for senior positions within the organization.
4.
Job enrichment – Organizations can design jobs
to involve higher knowledge and skill levels, greater responsibility and
autonomy to motivate employees. It will give them a chance to express
themselves while also providing more career growth and development
opportunities. They can also set up committees comprising employees from
different departments and seek their input in enriching job roles.
5.
Job security – Organizations must provide jobs
that are relatively secular compared to their competitors. It gives more
confidence to the staff in a company to express their creativity. Job security
is one of the most essential Non-Financial Incentives that can ensure better
performance from personnel within the company.
.jpg)
Comments
Post a Comment