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Financial Rewards And Incentives Should Be Used

Good Essays
‘Financial rewards and incentives should be used to motivate employees’. Critically evaluate.
Employee motivation is considered to be an important component of an organization to accomplish its objectives successfully. Managers use tools like financial as well as non-financial rewards and incentives to increase motivation. While financial rewards are generally considered to be beneficial, non-financial rewards also have an important role to play because of their impact on different types of motivation such as intrinsic and extrinsic. In general, intrinsic motivation is related to enjoyment of the job and extrinsic is related to financial benefits. This essay will focus on the different types of monetary incentives and then evaluate the use of financial incentives such as salary, bonuses, profit sharing and their benefits and will also evaluate the importance of non-monetary incentives (henceforth NMI) such as the reduction of an organization’s resources. Finally, this essay will propose a combination` of both financial and non-financial incentives to enhance employee’s productivity and attain goals set by the organization.
Intrinsic motivation refers to someone performing a task based on the enjoyment or intrinsic rewards. It may include responsibility, autonomy and challenges within an individual that motivate the person to do something and also it can be prompted through the proper job design. On the other hand, extrinsic motivation refers to someone performing a task in
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