Incentives (or Motivators)

Incentives (or Motivators)

(a) Concept of incentives

Motivation is process, which aims at stimulating human behavior in the desired manner, for the most effective and efficient attainment of enterprise objectives. The basic factor with the help of which the motivational process is initiated is called as an incentive (or a motivator).

If motivation is the soul of the managerial process: incentives (or motivators) arc the soul of the motivational process.

An incentive might be defined as the reward which is promised or offered to individuals; for the fulfillment of their unfulfilled needs; with a view to molding their behavior in the desired manner, for organizational purposes.

(b) Classification of incentives

(i) Incentives on the basis of approach

On the basis of approach to motivation, incentives may be positive or negative. Positive incentives are those which promise or offer some reward to persuade people in the desired manner, for organizational purposes. Such rewards of course, might be monetary or non-monetary or both.

Negative incentives (or disincentives) are those which hold out some punishment to employees; with a view to desisting them from undesirable behavior and encouraging positive behavior, for the attainment of’ organizational objectives.

Negative incentives might also be monetary or, non-monetary.

Examples of monetary negative incentives are lines, penalties etc.

Examples of non-monetary negative incentives are demotion severs of promotion), threat of dismissal from job or transfer of an employee to an inconvenient work-place, withholding annual salary increment etc.

(ii) Incentives on the basis of form

On the basis of the form, in which incentives are offered; incentives could be monetary or non-m6netary.

(A) Financial incentives

Monetary incentives are those which are offered in terms of money or through benefits: which are capable of measurement in terms of money. Monetary incentives are also called financial or pecuniary incentives.