EntrepreneurshipHuman Resource ManagementManagementUncategorized

Incentives: Meaning, Features and Types.

In this article we will discuss about Concept of Incentives, Features and Types.


INTRODUCTION : Anything which motivates human that is known as incentives that may be in monetary or non-monetary form. Monetary incentive includes pay and allowance, bonus pay, profit sharing, stock option, retirement incentives, etc and Non-monetary incentives include Intrinsic and Extrinsic. Intrinsic are those presence of which satisfies you but absence do not dis-satisfies like feedback. Extrinsic are those absence of which dis-satisfies you but presence is not satisfying like business card.

Incentives also plays an important role in motivating employees to have a healthy competition among them to perform better.

Meaning:

Anything that can attract an employees attention and motivate them to work can be called as incentives. Its aim to motivate employees and increase overall performance of an organization. Incentives can be classified as direct and indirect compensation.They can be prepared as individual plans, group plans and organization plans.

It can be classified under three categories Monetary, Non-monetary and Group incentives.

Monetary incentive includes pay and allowance, bonus pay, profit sharing, stock option, retirement incentives, etc and Non-monetary incentives include Intrinsic and Extrinsic.

Intrinsic are those presence of which satisfies you but absence do not dis-satisfies like feedback. Extrinsic are those absence of which dis-satisfies you but presence is not satisfying like business card.

Group incentives programs reward employees for their collective performance rather than for individual performance.

Features 

  1. It consist of both monetary and non-monetary form.
  2. It helps to motivates employees.
  3. Incentives can be classified as direct and indirect compensation.
  4. It leads to increase performance of an organization.
  5. Plan should be properly communicated to the employees.

 

Monetary incentives

Monetary incentives are in financial term.These incentives are important tool to motivate employees and these are given for extra ordinary performance, to perform task on time and ti increases employees performance. It includes:

  1. Pay and allowance
  2. Bonus pay
  3. Profit sharing
  4. Stock option
  5. Retirement incentive
  6. Commission
  7. Vocation incentives
  8. Performance incentives

 

Non-Monetary Incentives

Non-monetary incentives are not in financial term. It can be classified into Intrinsic and Extrinsic.

Intrinsic are those presence of which satisfies you but absence do not dis-satisfies like feedback.It includes

  1. Participative decision making
  2. Job autonomy
  3. Greater responsibility
  4. Creativity at work
  5. Opportunity for personal growth
  6. Variety of activities
  7. Interesting work

Extrinsic are those absence of which dis-satisfies you but presence is not satisfying. It includes

  1. Impressive job tittle
  2. Business card
  3. Preferred work assignment
  4. Preferred office
  5. Preferred parking space
  6. Personal secretory
  7. Lunch hour
  8. Flex office time

Group Incentive

Group incentive programs reward employees for their collective performance rather than for each employees individual performance.

Group  incentives make a stronger sense where employees tasks are interdependent and thus require a collective efforts for the completion of such tasks. Especially, this system of incentive is useful in project team where one workers contribution is almost impossible to reflect in measurable units, Under this plan, a productive plan is set as standard performance for a group of employees and the reward is provided by assessing the performance of the whole team.


So here we discuss about Incentives, Features and types. For any query comment below.

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