Incentives And Benefits Of Incentive Essay

Incentives And Benefits Of Incentive Essay

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Incentive systems play a vital role in underlying the companies’ goals or desired results. By linking them together, employees are informed and motivated to perform at a higher level, hence meet the desired results. There are a number of incentives used by companies, some are monetary rewards and some are non-monetary rewards. The most common one is incentive pay or pay-for-performance, which has been widely used among companies across the globe even in not-for-profit organisations. However, putting a large amount of money behind the desired results can lead to counterproductive results that are; employees narrowly focus on achieving what is measured or rewarded and neglect any other aspects which are crucial for a company’s growth; or top managers try to manipulate companies’ performance to benefit from rewards. Moreover, because each individual has different preferences and needs, so there is no certain way to maximize employee effort instead an effective incentive systems should be a balance mix between various types of rewards. This essay will focus on incentive pay and its benefits and drawbacks. Moreover, this essay will discuss the effectiveness of incentive pay in enhancing employee motivation and effort to perform their tasks.

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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Incentives And Benefits Of Incentive Essay

- Incentive systems play a vital role in underlying the companies’ goals or desired results. By linking them together, employees are informed and motivated to perform at a higher level, hence meet the desired results. There are a number of incentives used by companies, some are monetary rewards and some are non-monetary rewards. The most common one is incentive pay or pay-for-performance, which has been widely used among companies across the globe even in not-for-profit organisations. However, putting a large amount of money behind the desired results can lead to counterproductive results that are; employees narrowly focus on achieving what is measured or rewarded and neglect any other aspects...   [tags: Maslow's hierarchy of needs, Motivation]

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