Question

What is meant by monetary incentives? State any five types of monetary incentives. Which contribute to the performance of employees?

Answer 1

Monetary incentives- Those incentives which satisfy the subordinates by providing them rewards in terms of rupees. Money has been recognized as a chief source of satisfying the needs of people. Money is also helpful to satisfy the social needs by possessing various material items. Therefore, money not only satisfies psychological needs but also the security and social needs. Therefore, in many factories, various wage plans and bonus schemes are introduced to motivate and stimulate the people to work.
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Types of monetary incentives;
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1) Piece Rates – This is mostly used in production industries where employees are given a certain amount of money on each produced piece.

2) Pay Raise – These are mostly offered to employees who have worked in a company for a considerable longer period of time.

3) Bonuses – Another good form of monetary incentive is issuance of bonuses.

4) Sharing Profits – This is another excellent way of rewarding employees. A small profit portion is shared with employees based on their position, duration with the company and input in attaining the overall set goals.

5) Contests – Are mostly offered to sales and production personnel. An additional price or bonus is given to the employee or to a team with the highest production level. Again, Employers can offer cash rewards to employees with best suggestions just to encourage more input in terms of positive ideas that improve on sales, production or performances.