What if the company you work for doesn’t appreciate your hard work or doesn’t acknowledge you for the efforts you have put in completing your projects on time and doing everything the same way they asked you to? You wouldn’t like that, would you? These little appreciations or acknowledgments in the form of words or a promotion or a pay raise or anything that encourages you to work more for your employer is called an incentive.
No person can work for a long time without having proper motivating factors and influences. I am here to speak about the impact of incentives on employee performance.
There are different types of incentives like compensation incentive which includes raises, bonuses, profit sharing, etc., appreciation incentive which includes company parties and celebrations, ice cream socials, the company paid family activity events, birthday celebrations, paid group lunches, sporting events, and sponsored sports teams, recognition incentive such as praising employees, thanking employees, presenting employees with a certificate of achievement, or announcing an accomplishment at a company meeting.
And finally reward incentive include things such as gifts, monetary rewards, service award presents, gift certificates. All these incentives aim at providing motivation or a spur to continue with their good efforts.
Incentives create a sense of stability and loyalty in the employees towards the organization. It helps in reducing the cost of operating in the organization through increased attention and dedication to reducing waste at the time. It helps the employees in building morale and a lack of conflict which leads to the creation of higher stability in human resources working in organizations and clarity of objectives in the long term and near. It motivates the employee to work harder with honesty.
It satisfies all the needs and desires of the employees, which reflects positively on the organization. It helps to avoid a lot of problems such as absenteeism, turnover, and negative action. It creates a sense of security in the employees. By giving adequate incentives, employees know that their efforts will not go waste.
According to Maslow’s Need theory, self-actualization and self-esteem needs are of importance while in the workplace. People as social beings need the appreciation, respect, and acknowledgment from others for the efforts that they put in. This helps them develop their self-confidence. It helps them to attain more knowledge, independence, power, status, stature, etc. Vroom’s expectancy theory says that employees have different expectations and levels of confidence about what they are capable of doing.
Some companies provide their employees with vacations or days off after completing big projects. If there is an additional payment for extra working hours, it serves as an incentive, and the employee would utilize the time and give their best. Thus incentives are very essential for employees to improve their performance at workplaces as it gives them a reason to work hard for the organization. Most companies have understood its importance and have made sure that they provide their employees with adequate incentives.
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“Business, marketing, and blogging – these three words describe me the best. I am the founder of Burban Branding and Media, and a self-taught marketer with 10 years of experience. My passion lies in helping startups enhance their business through marketing, HR, leadership, and finance. I am on a mission to assist businesses in achieving their goals.”