Advantage of financial reward
Wise Step's contributor Chitra Reddy says that monetary rewards "encourage compliance rather than innovation and creativity. Provide employees an element of control: It is among few of the incentive programs that offer employees with an element of control over their level of income.
For example, for some people, money means buying a new car, taking the family on a vacation or being able to comfortably meet their monthly obligations.
That employee may be less motivated going forward. In such case, you can either reward your employees with non-monetary incentives or can give them monetary benefits to offer a direct boost to their performance level.
Practical Financial Advantages Financial rewards are advantageous to employees first and foremost because extra income is always useful. If employees receive smaller rewards than they expect or than they had received in the past, it may hurt morale. But how can employees be motivated to work toward this goal?
There are chances that more than one employee reaps great level of output to the organization. Inconsistency One drawback of motivating employees with financial rewards like bonuses and commissions is that such rewards are often inconsistent.
Issues: Problems or issues associated with these incentives forms the other factor on the basis of which these two are differentiated from each other. An incentive program can also be used as a recruiting tool.
From the perspective of workers who don't qualify for the bonuses, you've imposed a pay cut. Advantages of Showing Esteem Providing an employee with a financial reward is a way of demonstrating to him that you value his work and his contribution to the company. References 4. If the company performs poorly the next year, it might not have enough money to pay bonuses, even if employees worked just as hard. When you give a financial bonus to an employee, you know exactly what the bonus is worth. As a result, the employees build a positive approach towards work and the overall work atmosphere improves. They should be tied to specific performance results and given graciously, with a genuine sentiment that the employee has demonstrated his worth to the company and deserves to prosper as well. If an employee is doing work from home or is working late hours at home and in the office, then it becomes difficult for the organization to track the record of the employee in these situations. Both these types of incentives are effective in one way or the other, but they may end with different consequences. Also, it is easier for employees to keep a track record of monetary rewards or benefits, which they are able to obtain from the company. Also, it is possible that the firm is not able to provide all employees with the rewards. If factory output is the benchmark, workers on the shop floor may prioritize speed and let quality slide.
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