Presenting by:JagannathMBA 2 sem

Central university of karnataka

WELCOME

INCENTIVES AND

BENEFITS

CONTENTS Meaning Definition Types of incentives Definition of benefits Advantages Disadvantages Conclusion References

INTRODUCTION

Incentives are the rewards to an employee, over and above his base wage or salary, in recognition of his performance and contribution.

DEFINITION According to Milton L. RockIncentives are defined as ‘variable rewards granted according to variations in the achievement of specific results’.

The National Commission of Labour defines incentive as follows:

‘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 and targeted results’.

TYPES OF INCENTIVES.

Majorly two types:-

Financial incentives Non-Financial incentives

FINANCIAL INCENTIVES

The reward or incentive which can be calculated in terms of money is known as monetary or financial incentive. These incentives are offered to employees who have more physiological, social and security need active in them.

THE COMMON MONETARY INCENTIVES1.Pay-off and allowances Regular increments in salary every year and grant of allowance act as good motivators. In some organizations pay hikes and allowances are directly linked with the performance of the employee.

2. Commission Commission is the common incentive offered to employees working under sales department.

3.Co-parternship /stock optionMany companies offer share in management or participation in management along with share in profit to its employees as an incentive to get efficient working form the employees.

4. Bonus Bonus is a onetime extra reward offered to the employee for sharing high performance. Generally when the employees reach their target or exceed the target then they are paid extra amount called bonus.

5.Retirement benefitsSome organizations offer retirement benefits such as pension, provident fund, gratuity etc. to motivate people. These incentives are suitable for employees who have security and safety need.

NON- FINANCIAL INCENTIVES

The incentives which cannot be calculated in terms of money are known as non-monetary incentives. Generally people working at high job position or at high rank get satisfied with non-monetary incentives.

1.Status Status refers to rank, authority, responsibility, recognition and prestige related to job. By offering higher status or rank in the organization managers can motivate employees having esteem and self actualization need active in them.

2. Organizational climate It refers to relations between superior/ subordinates. Good working environment..

3. Career advancementManagers must provide promotional opportunities to employees.

4. Job enrichment Employees get bored by performing routine job. They enjoy doing jobs which offer them variety and opportunity to show their skill.

5. Employee’s recognition Recognition means giving special regard or respect which satisfies the ego of the subordinates.

6. Job securityJob security means giving permanent or confirmation letter.

7. Employee’s participation It means involving employee in decision making especially when decisions are related to workers.

8.Employee empowermentIt means giving more freedom to subordinates.

NON-FINANCIAL INCENTIVES

Materialistic Non-materialistic

Canteens Housing facilities Education facilities Transportation Health fund schemes

Recognition and praise Good working

environment Cordial human

relations Job satisfaction

EFFECTIVE INCENTIVE PLAN Incentive plan should be simple so that it

may be understood by the workers.(e-resources)

The plans should be accepted to the workers, trade unions and management.

The incentive rates should be made attractive so as to encourage the worker to give his best results.

BENEFITS Benefits are those monetary and non

monetary benefits given to the employee during and post employment but not to the employees contribution to the organization.

FOR EXAMPLE Use a car for private purpose

Are provided with cheap loan

Are provided with free private health insurance

Are provided with cleaning services for private residence etc.

ADVANTAGES1.Incentive and benefits plans motivate workers for higher efficiency and productivity.

2. It can improve the work-flow and work methods.

3. Incentive plans make employees hardworking and innovative.

CONT..4. When employees are dedicated, supervision costs can be reduced.

5. It helps workers improve their standard of living.

6. The other benefits offered by incentive plans are reduced turnover, reduced absenteeism.

DISADVANTAGES1. Incentive plans can lead to disputes

among workers, since some earn more than others.

2. Hunger for money among the workers forces them to overwork, which may affect their health.

3. Some workers may involve in malpractices in order to earn more money.

CONT…4. For enhanced incentives, they may sacrifice quality.

5. It also leads to corruption by falsifying the production records.

6. Incentive plans can create tensions among different personnel.

REFERENCES

Human resource management by VSP Rao Human resource management by Biswajeet

Pattanayak www.Wikipedia.com Other internet sources

QUESTIONS

THE END