One of the organizational tools that can be used in ensuring an effective organizational performance of employees is incentive which can be inform of awards given out to workers for a work well done and the achievement of predetermined organizational objectives. Incentive can also come inform of an increased payment made to employees on the basis of the amount of output or results attained.
Therefore, incentives are designed to encourage employees to perform better and more effectively irrespective of the type of incentive given. Incentives has a way of promoting employees capacity and moving abilities, it motivates them to work more and develop their skills, knowledge, abilities in order to balance and meet up with organization demands as well as meet the individuals needs which in turn improves on his/her performance in the organization.
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The satisfaction employees gain form incentives enhances their corporation with fellow employees, which gives chance for promotion, identification and appreciation of job efforts, impact of the career, participation in decision making, opportunities for growth and innovation and the chance to express his opinion.
Incentives stimulate workers to do their jobs more effectively and efficiently and further seek ways of improving on their skills and abilities towards organizational objectives and goals. Organizations give out incentives to workers just to motivate and encourage them tom do better and improve more on their jobs descriptions. However, in most organizations, the effectiveness of workers is highly dependent on how motivated they are and how the management of the organization treats and appreciate their efforts. Employees love it when they are been appreciated even for a little effort, it encourages and motivates them. Therefore, organizations are encouraged to use the tool of incentive to motivate their workers and also improve organizational performance. Consequently, the sole purpose of incentives is to move the energies and skills of workers towards organizational objectives which include: maximum production, efficiency, outstanding performance to increase competitive advantage and many others. It is not enough for organizations to have competent workers for the jobs, but need workers to be dedicated and committed towards the achievement of organizational objectives and also must avail and make themselves available to work and ensure maximum productivity and the achievement of these can only be through incentives.
Organizational performance comprises the actual output or results of an organization as measured against its intended outputs. Organizational performance encompasses three specific areas of firm outcomes: financial performance; product market performance; and shareholder return.
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Organizational performance also involves analyzing a company’s performance against its objectives and goals. In other words, organizational performance comprises real results or outputs compared with intended outputs.
Incentive is a measure stimulating human effort, whereby employees are driven to put in their best. Incentives can also be seen as compensation, other than basic wages and salaries that fluctuates according to employees’ attainment of some standard, such as pre-determined benchmark, individual or group goals or organizational earning. Generally, incentives are variable payments made to employees on the basis of the amount of output or results attained.
Anything that can attract an employee’s attention and motivate them to work can be called an incentive. However, an incentive aims at improving the overall performance of an organization.
Incentives are means under which gratification, or are a set of circumstances that are available in the work environment to satisfy the desires of workers and workers in turn seek to satisfy the organization. Incentives are factors that drive productive workers in the unit to work with all their strengths to achieve the set goals and objectives of the organization.
TYPES OF INCENTIVES
Financial incentives may mean the amounts paid to employees, either in the form of a lump sum or in the form of monthly payments or in any other form which serves as additional income to an employee. It is considered the oldest forms of incentives which are characterized by quick and immediate form that make employee feel of an immediate feedback of their effort in meeting the organizational goal. financial incentives is also a set which may satisfy basic human needs, encourage employee to do their best, and increase the level of their competences such as through prompt payment of salary, bonuses, allowances, profit sharing, and rewards.
moral incentive is a set of motives aimed at achieving emotional and psychological balance and humanitarian needs of employees by treating them properly and eliminating issues that may bring up complains, reward and punishment rule, provision of systemic and entertainment services for employees and raising spiritual enhancement in the workplace.
Moral incentive may make an employee behave in a particular way when he has been taught to believe that it is the right or proper or admirable thing to do. If he behaves as others expect him to, he may expect the approval or even the admiration of the other members of the collectivity and enjoy an enhanced sense of approval or self esteem. When employee behaves improperly, he may be criticized, disrespected, ridiculed, or even ostracized from the collectivity, and he may experience unpleasant feelings of guilt, shame, or self condemnation. Moral incentives are related to psychological needs, the increased interest to this aspect came after the surfacing of human relations theories. Moral incentives are based on employers respecting the feelings of their employees, their hopes and aspirations. Moral incentives could be in the form of participatory decision making, certificates of appreciation, training, and parties for illustrious employees’ etc.
Moral incentives are therefore related to internal and external environment of the firm, such as supervision, leadership, fellowship, the working conditions of light, ventilation, noise heat, decorations and involvement in decision making. It can be asserted that positive moral incentives consequently raise of spirit for the individuals, such as job enrichment, holidays, health insurance, the appropriate post, nature of supervision, sense of belonging, stability, job security, participation in decision-making, promotion, confidence in the objectives of the firm, system proposals, listing in the panel of honor, social harmony, literarily, and moral distinguishing. Negative moral incentives are for negligent acts, such as shame and blame.
THE IMPACT OF INCENTIVES ORGANIZATIONAL PERFORMANCE
The advantages of financial incentives to an organization will definitely have a rapid and immediate impact on the employees’ efforts which encourages them to do their work to the fullest, increase in productivity, increase in revenue as a result of increase in productivity and improvement in performance. Employees gain numerous psychological and social benefits as a result of enhancing their purchasing power to satisfy their needs of goods and services.
What is expected of every organization manager is to improve productivity in workers by all means possible as well as gain a competitive edge in the market through effective compensation packages that may come inform of i9ncentives. The goal of every organization is anchored on productivity, effective performance, motivation quality, and service in managing people
Therefore, incentive provides the means through which organizations can motivate and encourage their workers to work productively. Organizations use incentives to reward and compensate exceptional workers for their dedication to work and productivity. However, these incentives can come in financial or non-financial forms but the main objective is to compel the employees to show more efforts in any given task. Incentives are forces that cause employee’s to behave in a certain way on any given day usually as hard as possible. However it is noteworthy that incentives are designed to get maximum employee’s productivity from the employee’s and help retain the most productive and performing employees. Therefore, organizations must ensure they use the best incentives to get the required result from their employees. Incentives are instrumental drive towards employee motivation and employee’s productivity as it has great benefits and high potential to motivate workers to put in their best in any given task.
The level of motivation received by an employee as reflected in the satisfaction with the base pay package and other incentives goes a long way to influencing the employees’ attitude to work, loyalty, performance, and job satisfaction.