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Incentives in business organisation
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Individual’sneedsarevariedinnature.Someofthem canbesatisfiedbymoneywhile othersarenot.Onthisbasis,incentivescanbeclassifiedintotwo:( 1 )Monetary incentivesand( 2 )Non-monetaryincentives. 1 .MonetaryIncentives:Incentivesdirectlyorindirectlyassociatedwith‘monetary benefitsarecalledmonetaryorfinancialincentives.Thesebenefitsareexpressedin termsofmoney.Theseincentivesaddtothemoneyincomeoftheemployees. Monetarybenefitsnotonlyfulfilthephysiologicalneedsbutalsotheneedforsocial statusandpower.Examplesofmonetaryincentivesarebettersalariesandwages, overtimeallowance,leavewithpay,bonus,profitsharing,medicalreimbursement, housingfacility,pension,etc.Financialincentivesmotivateworkersmoreatdowerlevel thanthoseofhigherlevel. 2 .Non-monetaryIncentives:IncentiveswhichcannotbemeasuredintermSofmoney arecallednon-monetaryornon-financialincentives.Inotherwords,theyareincentives whichdonotaddtothemoneyincomeoftheemployees.Employee$athigherlevelsof managementattachgreaterimportancetosocialandpsychologicalneeds.These needscannotbesatisfiedbymoneyalone.Nonmonetaryincentivesthusaim at satisfyingthem.Theseincentivesincludegivingfigherstatus,recognition,assigning challengingjobs,seekingsuggestions,participationinmanagement,delegating authorities,etc.