By :- Dhruv S.

Kapadia

Incentives
MEANING Incentives are an additional remuneration payable to efficient workers for their meritorious performance in terms of time, costs and quality to motivate them to be more productive.

According to the National Commission on Labour

Wage incentives are extra financial motivation. They are designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present or targeted results

Burak and Smith have defined incentive as,

An incentive scheme is a plan or program to motivate individuals for good performance. An incentive is most frequently built on monetary rewards (incentive pay or a monetary bonus), but also may include a variety of non-monetary rewards or prizes

According to Venkata Ratnam and Srivastava

A wage incentive scheme is a method of payment for work of an acceptable quality produced over and above a specified quantity or standard.

The main features of incentives from the above definitions can be listed as follows
Incentives are based on a standard of performance for the job. Incentives are measurable in monetary terms. Incentives are meant to motivate workers for better and more performance. Incentives have direct linking to performance. Incentives vary from person to person and from time to time for thesame person.

Objectives

To understand the effect of incentives as per the profitability for both workers and management. To understand and get help on how to increase the production. To understand that incentives help in motivation and motivation helps in employment effectiveness. To understand all different types of incentives for employee effectiveness. To know how to maintain harmony and stable organizational structure.

INCENTIVES = MOTIVATION + EFFICIENCY = EMPLOYEE EFFECTIVENESS

Incentives

Monetary Incentives

Non-Monetary Incentives

Monetary Incentives
MEANING

Money is the main element of incentives. It boosts the enthusiasm and self-confidence of the workers. It provides the workers with economic security and gives the worker a social security.

Types of Monetary Incentives

Profit-Sharing. Co-Partnership. Bonus. Suggestions and Advices. Commission. Prizes.

Non-Monetary Incentives
MEANING
Incentives not based on money are non-monetary incentives. Non-monetary incentives are useful in increasing production and efficiency.

Types of Non-Monetary Incentives

Security of employment.

Recognition.
Promotion. Adviser. Assignment of responsibility. Welfare activities and amenities. Other incentives such as housing facilities, life

insurance, educational and conveyance allowances etc.

Literature Review

Incentives in Organisations: A Selective Overview of the Literature with Application to the Public Sector
Simon Burgess And Paul Metcalfe (December 1999)

Employees do respond to incentives, often in sophisticated so proper incentive scheme and ways that help to benefit the organisation as a whole. The design of the scheme is hence extremely important for employee effectiveness.

Reflective learning
Both the monetary and non monetary incentives are important for an organization and there must be an stable distribution between these incentives. Monetary and non monetary incentives both have their pros and cons but both when programmed and planed collectively helps in achieving employees effectiveness Incentive mainly help in employee motivation which in forward helps in employee effectiveness and organization effectiveness.

Thank You