MONEY AND MOTIVATION

Intrinsic motivation stems from feelings of achievement and accomplishment and is concerned with the state of self-actualisation in which the satisfaction of accomplishing something worthwhile motivates the employee further so that this motivation is selfgenerated and is independent of financial rewards. Some of the intrinsic motivators are praise, recognition, responsibility, esteem, power, status, challenges and decision-making responsibility.
INCENTIVES FOR OPERATIONS EMPLOYEES AND
EXECUTIVES
Incentive plans envisage a basic rate usually on time basis applicable to all workers and incentive rates payable to the more efficient among them as extra compensation for their meritorious performance in terms of time, costs and quality. The incentive rates may take the form of bonus or premium. Bonus means payment to workers of the entire benefit accruing from savings in costs, time, improvement in quality, etc. Premium means the benefits accruing to the firm as the result of higher output or better quality will be shared equally or on some agreed basis between the management and the workers.
FEATURES OF INCENTIVE PLANS
The characteristics of these plans are as follows:
1. Minimum wages are guaranteed to all workers.
2. Incentives by way of bonus, etc., are offered to efficient workers for the time
saved.
3. A standard time is fixed and the worker is expected to perform the given work
within the standard time. The standard time is set after making time studies for the
performance of a specific job.
Guaranteed minimum wages: It must guarantee minimum wages irrespective
of the performance of the worker.
Simple: It must be simple to operate and easy to understand.
Equitable: All workers should get an equal opportunity to earn the incentive pay.
Equal pay for equal work should be the rule.
Economical: The incentive plan should not be a costly affair. The benefits must
exceed the costs.
Flexible: It must be reasonably flexible so as to take care of changes in technology,
demand for and supply of skills, competitive rates in the industry, etc.
Support: The incentive plan should take workers and unions into confidence. It
should be implemented after consulting the workers and their union. Generally
speaking, it should be the outcome of mutual trust and understanding between
management and workers.
Motivating: The incentive should be large enough to motivate the worker to superior performance. At the same time, there should be checks and balances to ensure that the worker does not exert himself to painful levels, affecting the quality.
Prompt: There should be very little time gap between performance and payment. As soon as the job is finished, the worker should get his (incentive) earnings promptly. Incentive plans incorporate all the advantages of piece rate wages but they resemble time wages so far as the payments are concerned. Under Incentive Plans, the employer as well as the employee share the benefit of time saved. The various incentive plans have benefited both workers and employers, as they result in higher wages, lower labour turnover and better industrial relations and morale. The following are the more important incentive plans of wage payment.


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