The human resources management is challenging job in today's competitive market. The every business wish retain most experienced, skilled and talented employees in the business. To attract and retain qualified employee in business every companies have different HR policies to their employees. An incentive is a reward given to a person to stimulate his or her actions to a desired direction. Incentives have motivational powers and are widely utilized by individuals and large organizations to motivate employees. They can either be monetary or non–monetary. The staff benefits offered by business can be in the form of monetary incentive, fringe benefits and personal acknowledgment.
Monetary incentives are financial incentives used mostly by employers to motivate employees towards meeting their targets. Monetary incentives are always expected by employees and most common source of employees turnover is not enough monetary compensation. Money, being a symbol of power, status and respect plays a big role in satisfying the social–security and physiological needs of a person. But the monetary value will not solve the cultural problems in the organization and its always hard on the budget.Types of monetary incentives includes:-
- Performance Bonus
- Pay Raise
- Profit Sharing
- Piece Rate
- Sale commission
Fringe benefits are non monetary incentive to motivate employees apart from normal salary. Good fringe benefits attract fresh talent people to the organization. The fringe benefits are more popular among the business right now. Compare to monetary terms most of the fringe benefits are inexpensive.The fringe benefits include:-
- Flexible work arrangement.
- Provide extensive training plans.
- Offer rewards based on specific personal interests.
- Provide the opportunity for staff to engage in volunteer work.
- Career development opportunities
The staff meet the employee expectation and above want to recognize there work in the organization. The employee reach beyond the performance target every year, the achievement have to be recognize to motivate employees. The employees can be recognized by given award or achievement certificate. The employee work recognize by senior management is very important for the staff motivation.
Appreciation is a fundamental human need. Employees respond to appreciation expressed through recognition of their good work because it confirms their work is valued by others. When employees and their work are valued, their satisfaction and productivity rises, and they are motivated to maintain or improve their good work.
In the absence of mutual trust between management and workers, an incentive may be viewed as an attempt to improve production or profit of the business. The employees incentive should be focused on to attract new talented employees and retain the existing workforce. Monetary incentive is the most common form of incentive offered to employees. But today business environment is changing employee is not only looking for the monetary compensation. The businesses provide extensive non monetary incentive to their employees. The organization can have a motivated workforce by providing the comprehensive pay package to there employees. The good pay package must include monetary incentive, fringe benefits and personal acknowledgement.