Explain different financial and non-financial incentives used to motivate employees of a company.
Financial Incentives Financial incentives refer to incentives which are in direct monetary form or measurable in monetary term and serve to motivate people for better performance. The financial incentives used in organisations are listed below
(i) Pay and Allowances For every employee, salary is the basic monetary incentive. It includes basic pay, DA and other allowances. Salary system consists of regular increments in the pay every year and enhancement of allowances from time to time.
(ii) Productivity Linked Wage Incentives Several wage incentives aim at linking payment of wages to increase in productivity at individual or group level.
(iii) Profit Sharing Profit sharing is meant to provide a share to employees in the profits of the organisation. This serves to motivate the employees to improves their performance and contribute to increase in profits.
(v) Co-Partnership/Stock Option Under these incentives schemes, employees are offered company shares at a set price which is lower than market price. The allotment of shares creates a peeling of ownership to the employees and makes them to contribute more for the growth of the organisation.
(vi) Retirement Benefits Several retirement benefits such as provident fund, pension and gratuity provide financial security to employees after their retirement. This act as an incentive when they are in service in the organisation.
(vii) Perquisites
In many companies perquisites and fringe benefits are offered such as car allowance, housing, medical aid, and education etc over and above the salary. These measures help to provide motivation to the employees/managers.
Non-financial Incentives
Incentives which help in fulfilling our psychological, emotional and social needs are known as non-financial incentives. Some of the non-financial incentives are
(i) Status Status means ranking or high positions in the organisation. Whatever power position prestige an employee enjoys in the organisation are indicated by his status. Psychological, social and esteem needs of an individual are satisfied by status given to their job.
(ii) Organisational Climate This indicates the characteristics which describe an organisation and distinguish one from the other. Individual autonomy, reward orientation, consideration to employees, etc are some of the positive features of an organisation. If managers try and include more of these in an organisation helps to develop better organisational climate.
(iii) Career Advancement Opportunity Managers should provide opportunity to employees to improve their skills and be promoted to the higher level jobs appropriate skill development programmes and sound promotion policy will help employees to achieve promotions. Promotions have always worked as tonic and encourages employees to exhibit improved performance.
(iv) Job Enrichment Job enrichment is concerned with designing jobs that include greater variety of work contentment, require higher level of knowledge and skill, give workers more autonomy and responsibility and provide opportunity for personal growth and a meaningful work experience.
(v) Employee Recognition Programmes Recognition means acknowledgement with a show of appreciation. When such appreciation is given to the work performed by employees, they feel motivated to perform/work at higher level, e.g.,
(a) Congratulate the employee
(b) Displaying names of star performers
(c) Installing awards
(d) Distributing mementos
(vi) Job Security
Employees want their job to be secure. They want certain stability about future income and work so that they do not feel worried on these aspects and work with greater zeal. There is only one problem with this incentive i.e., when people feel that they are not likely to lose their jobs, they may become relaxed.
(vii) Employee Participation
It means involving employees in decision making of the issues related to them. In many companies, these programmes are in practice in the form of joint management committees, work committees canteen committees etc.
(viii) Employee Empowerment
Empowerment means giving more autonomy and powers to subordinates. Empowerment makes people feel that their jobs are important. This feeling contributes positively to the use of skills and talents in the job performance.
How can the company ensure that higher order needs z. e., the esteem and self actualisation needs are met?
Give a model of formal communication system that the company can follow. Identify the barriers in this model, how can they be removed?
In an organisation employees always feel they are under stress. They take last initiative and fear to express their problems before the manager. What do you think is wrong with the manager?
What financial and non financial incentives can the company use for employees and agents separately to motivate them. What benefits company will get from them?
Identify the qualities of leadership in this line of business that the company manager must possess to motivate employees and agents.
How can informal communication help to supplement formal communication model given by you in answer to question?
Explain the qualities of a good leader. Do the qualities alone ensure leadership success?
How can the company ensure that higher order needs z. e., the esteem and self actualisation needs are met?
Explain different financial and non-financial incentives used to motivate employees of a company.
Y limited is a bank functioning in India. It is planning to diversify into increase business. Lately, the Government of India has allowed the private sector to gain entry in the increase business. Previously, it was the prerogative of LIC and GIC to do insurance business. But now with liberalisation of the economy and to make the field competitive other compnies have been given licenses to start insurance business under the regualtion of Insurance Regulatory and Development Authority’.
Y limited plans to recruit high quality employees and agents and exercise effective direction to capture a substantial part of life and non-life insurance business.
Identify how the company can supervise its employees and agents effectively. What benefits will the company derive from effective supervision?
What are the common barriers to effective communication suggest measures to overcome them?
Workers of a factory often come to the production manager with the grievances. The production manager finds himself overburdened with so many tasks advise a way to relieve the production managers.
The workers always try to show their inability when any new work is given to them. They are always unwilling to take up any kind of work. Due to sudden rise in demand a firm wants to meet excess orders. The supervisor is finding it difficult to cope up with the situation. Suggest ways for the supervisor to handle the problem.
In an organisation all the employees take things easy and are free to approach anyone for minor queries and problems. This has resulted in everyone taking to each other and thus resulting in inefficiency in the office. It has also resulted in loss of secrecy and confidential information being leaked out. What system do you think the manager should adopt to improve communication?