rewards and incentives
An incentive or reward can be anything that attracts a workers attention and stimulates him to work. An incentive program is most frequently built on monetary rewards but may also include a variety of non-monetary rewards. The term reward has been used both in the restricted sense of participation and the widest sense of financial motivation. The concept of reward implies the increased willingness or motivation to work and not the capacity to work
Rewards
The use of Incentives or Rewards assumes that people’s actions are related to their skills and ability to achieve important long run goals. Even though many organizations, by choice, or tradition or contract, allocate rewards on non-performance criteria, rewards should be regarded as a “payoff” for performance.
An Incentive Plan has the following important objectives
1. An incentive plan may consist of both ‘monetary’ and ‘nonmonetary’ elements.
2. Mixed elements can provide the diversity needed to match the needs of individual employees.
3. The timing, accuracy and frequency of incentives are the very basis of a successful incentive plans.
4. The plan requires that it should be properly communicated to the employees to encourage individual performance, provide feedback and encourage redirection.
Determinants of Incentives
These features are contingencies, which affect the suitability and design of incentives to varying degrees. The effective use of incentives depends on three variables-the individual, work situation, and incentive plan.
A.The Individual and the Incentives
Different people value things differently. Enlightened managers realize that all people do not attach the same value to monetary incentives, bonuses, prizes or trips. Employees view these things differently because of age, marital status, economic need and future objectives. However, even though employee reaction to incentives vary greatly, incentives must have some redeeming merits. For example, there might be a number of monetary and nonmonetary incentive programs to motivate employees. Money, gift certificates, praises, or merit pay are of the continuous parade of promotion.
B.The Work Situation
This is made up of four important elements:
· Technology machine or work system, if speed of equipment operation can be varied, it can establish range of the incentive
· Satisfying job assignments, a workers’ job may incorporate a number of activities that he finds satisfying. Incentives may take the form of earned time-off, greater flexibility in hours worked, extended vacation time and other privileges that an individual values.
· Feedback, a worker needs to be able to see the connection between his work and rewards. These responses provide important reinforcement.
· Equity, worker considers fairness or reasonableness as part of the exchange (or his work,) Incentives, in general, are important motivators. Their effectiveness depends upon three factors: drives, preference value, and. satisfying value of the goal objects.
Rewards
The use of Incentives or Rewards assumes that people’s actions are related to their skills and ability to achieve important long run goals. Even though many organizations, by choice, or tradition or contract, allocate rewards on non-performance criteria, rewards should be regarded as a “payoff” for performance.
An Incentive Plan has the following important objectives
1. An incentive plan may consist of both ‘monetary’ and ‘nonmonetary’ elements.
2. Mixed elements can provide the diversity needed to match the needs of individual employees.
3. The timing, accuracy and frequency of incentives are the very basis of a successful incentive plans.
4. The plan requires that it should be properly communicated to the employees to encourage individual performance, provide feedback and encourage redirection.
Determinants of Incentives
These features are contingencies, which affect the suitability and design of incentives to varying degrees. The effective use of incentives depends on three variables-the individual, work situation, and incentive plan.
A.The Individual and the Incentives
Different people value things differently. Enlightened managers realize that all people do not attach the same value to monetary incentives, bonuses, prizes or trips. Employees view these things differently because of age, marital status, economic need and future objectives. However, even though employee reaction to incentives vary greatly, incentives must have some redeeming merits. For example, there might be a number of monetary and nonmonetary incentive programs to motivate employees. Money, gift certificates, praises, or merit pay are of the continuous parade of promotion.
B.The Work Situation
This is made up of four important elements:
· Technology machine or work system, if speed of equipment operation can be varied, it can establish range of the incentive
· Satisfying job assignments, a workers’ job may incorporate a number of activities that he finds satisfying. Incentives may take the form of earned time-off, greater flexibility in hours worked, extended vacation time and other privileges that an individual values.
· Feedback, a worker needs to be able to see the connection between his work and rewards. These responses provide important reinforcement.
· Equity, worker considers fairness or reasonableness as part of the exchange (or his work,) Incentives, in general, are important motivators. Their effectiveness depends upon three factors: drives, preference value, and. satisfying value of the goal objects.