On one hand, people generally value money as it can be used to acquire basic needs. Hence, organisations use monetary incentives to align employees’ interest with the organisations’ goals by providing rewards when their employees reach specific targets. These incentives are in the form of salary increases, sales commission, piece rate incentive, bonus, and stock based incentives. They inform and emphasize employees on how they should be directing their effort. Moreover, incentives motivate employ...
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...ize the firms value. This plan could satisfy more needs than the short term incentives, namely physiological needs, safety needs, and esteem needs. By receiving these rewards means that those managers have achieved challenging targets, hence they gain respect from their subsidiaries, colleagues and even their bosses. Therefore, an effectively motivated rewards should include non-monetary incentives, such as autonomy, recognition or promotion, together with monetary rewards to fulfill individual needs.
In conclusion, monetary incentives are indispensable in every organisations. They emphasize the desired results and motivate employees to achieve certain targets. As a motivator, monetary incentives exploit on fulfilling employees’ needs. However, monetary incentives can bring a number of disadvantages to a company, if it inappropriately applies the incentive systems.
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