Pros And Cons Of Monetary Incentives

Improved Essays
A monetary incentive is a cash reward given when an employee meets or goes above and beyond expectations. Rewards given include; bonuses, raises, profit sharing, gift cards and stock options. Monetary incentives are best used with employees who are driven or motivated by money. Monetary incentives are often used and are on the rise of use in organizations. They have been shown to be successful in many companies and organizations. The monetary incentive helps give a positive influence on the company’s productivity. The monetary incentive is used to motivate employees to perform better and also to increase productivity in companies and organizations (Bonner, S. E., & Sparkle, G. B. (2002). A monetary incentive plan has both negative and positive …show more content…
It helps motivate them to do better. It also helps motivate employees to improve at work. Another positive is that the monetary incentive can help nurture desirable behaviors in employees. Another pro of the monetary incentive plan is that it can increase productivity in the company or organization. Effort durations can be increased when using the monetary incentive plan in these organizations when employers use contracts. Employees are more likely to take fewer breaks and be more willing to work overtime while using this incentive plan (Gneezy, U., Meier, S., & Rey-Biel, P). Another positive effect is that individuals are willing to learn new skills that they need for future performance. Individuals are more likely to be better at strategizing and problem solving due to the increased effort that they put …show more content…
Maslow’s hierarchy of needs contains five levels, physiological, safety, belongingness, esteem, and self-actualization. Ed Brown, CEO of Patron tequila caters his employee’s lunch every day; this is an example of fulfilling the most basic level on Maslow’s hierarchy of requiring food, water, and oxygen. Safety is the second level in the hierarchy of needs. Safety is the need for a secure emotional and physical environment, Ed Brown, by accommodating to his religious employees and putting family first, has filled this need of

Related Documents

  • Great Essays

    Every aspect within an organization must be addressed and understood in order for the organization to be profitable. Periodically, numerous organizational issues emerge and must be assess with strategy planning and expertise. With Newstrom’s insight and different scholars, the root causes and the problems were analyzed in both Engstrom Auto Mirror Plant and Workplace Analysis. The case study analysis identifies organizational issues and provides possible solutions. Engstrom Auto Mirror Plant solution proposal contain key terms, such as, Motivation, Communication, Feedback, Goal Setting Theory, Empowering Employees, Social System and Equity Theory.…

    • 1952 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    Performance measures are easily developed and exchange between groups and individuals within groups foster team spirit (McGraw-Hill/Irwin, 2002). Team incentives also increase participation of employees in decision-making, sharing of knowledge, cushions and protect individual employees who may feel exposed by individual incentives, and is highly supported among employees (McGraw-Hill/Irwin, 2002). Team incentive plans boost interrelation between employees and management, makes each one feel part of the whole, lead to co-operate problem sharing and a greater correlation between individual rewards and organizational profits (Milkovich,…

    • 777 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    In my opinion, incentives are to drive high self-motivated individuals to their full potential, to sell a product that a company wants in return on their…

    • 743 Words
    • 3 Pages
    Improved Essays
  • Superior Essays

    Today workers are motivated by many different forms and intentions. The cause of motivation may be considered as desire or need. All over the world, there are many organizations that have researched types of motivations that will motivate employees to the best of their ability and to help them perform to the upmost quality in the delivery of health care. Many organizations have done this because employee performance and productivity relates and defines who and what there organization is all about, but most importantly the organizations profitability. There are numerous ways to motivate employees, but the most rewarding way to motivate employees to enhance their performance, is to suggest a pay-for-performance program.…

    • 1098 Words
    • 5 Pages
    Superior Essays
  • Improved Essays

    The incentive programs will directly affect other departments and the organization positively. The attendance incentive program will hopefully decrease the amount of unscheduled absences. As each credit associate has a specific account base, customer service and sales representatives are accustomed to contact certain credit reps assigned to their account. When a credit associate is scheduled off, an out of office is set on their email and their voicemail explaining who to contact in their absence. If the credit associate is not scheduled off, there is no direction on who to contact for assistance, and questions will go unanswered for an extended amount of time.…

    • 228 Words
    • 1 Pages
    Improved Essays
  • Improved Essays

    The quest to outperform the competition, produce industry leading results, and achieve short and long term business goals, is a never ending challenge in today’s business environment. Therefore, government agencies, non-profit organizations, and publicly traded and privately held companies have developed and launched various monetary incentive programs to entice new talent, retain existing talent, and motivate all employees to achieve record breaking results (Miller, 2014). Similar to most companies, the Gaines Company is leveraging its employee compensation program to attract, retain, and motivate talented employees to produce industry leading results. As a result, the Gaines Company recent launched a monetary incentive whereby managers receive…

    • 304 Words
    • 2 Pages
    Improved Essays
  • Decent Essays

    Incentive Plan

    • 582 Words
    • 3 Pages

    When considering an incentive plan, the companies intent is to reward employees for their performance. The dilemma is determining which plan would best meet an organization's needs. First, an incentive plan that is well-designed can assist a company in meeting objectives by improving quality, customer service, and productivity. To be successful, the plan must appropriately address the company objectives and include measurable, realistic, and attainable goals. Next, Sally is debating between the team-based incentive plan and the individual incentive plan as a rewards program for employees.…

    • 582 Words
    • 3 Pages
    Decent Essays
  • Improved Essays

    This book study came together in the most natural of ways and under the best direction that the group could propel. This motley crew of academics have a history together that allows them to be frank and short whilest only being considered to be honest and upright and not harsh or rude. Not only has happenstance driven us serendipitously together in a group but also selected a book that fits the modus operandi of said group. It can not be overlooked that these bedfellows of academic study seek to operate under those very conditions that Daniel H. Pink touts in this work.…

    • 1396 Words
    • 6 Pages
    Improved Essays
  • Great Essays

    The combination of the two incentives will work well to improve the organizational performance and motivate behavioral changes. Since we are a multispecialty facility with deep roots in medical education we need the faculty members to continue to work well together both within their institutional units and the overall enterprise. For example: Surgeries cannot occur without the help of an anesthesiologist. We need to work together as an institution to not only improve patient care in a faculty members own institutional unit but across the enterprise. By placing emphasis on both a team-based and individual clinical incentive the faculty member is encouraged to continue to work as a team but is able to influence their own…

    • 1654 Words
    • 7 Pages
    Great Essays
  • Improved Essays

    Wells Fargo’s Ethical Scandal It was a bank heist greater than the Brink's job in 1950, however, the brigands used no ordinary firearms or getaway vehicles. As opposed to being quick on the draw, they had quick fingers on computer keyboard and mouse. Over the course of four years, The Wells Fargo Bank of San Francisco, had at least 5,000 employees opened more than a million fake bank and credit card account on behalf of innocent customers. This monumental scandal that broke the basic principle of ‘doing ethical business,’ has also brought many other issues to light. Some of these include the lack of integrity from the people who lead this organization who lied and denied the fraud, the deficiency to properly run a mega-organization, the indignation from the people affected by this fraud, the lack of ownership when a mistake is made.…

    • 913 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Rewards can be also too utilized to eliminate some undesired behavior and are asset for securing new sources of talent. The uses of rewards are the organization efforts to attract and maintain good employees and rewarded effective managers. Rewards can also help set the culture within the organization and valuable HR best practice (Stiles, et al., 2006). However, rewards must be designed in link to the organization strategic goals and align with the organization values. . If not properly implemented rewards can have minimal impact on assisting the organization in meeting its strategic goal, and some organization spend vast amount of money on reward for employees and have very little qualitative evidence that employees are performing any better (Talkdesk,…

    • 683 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Incentives are effects for performing actions. There are positive and negative incentives, positive are ones that increase benefit and reduce cost and negative are vice versa (Sexton, 2015). My largest incentives for continuing my education are really quite simple; my sons. I want my sons to grow up with a healthy respect and yearning for education, the only way I saw for these to things to occur was by showing them my dedication to education by continuing it.…

    • 271 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    Toby, an eight-year-old child finally comes home from school. He has been working since eight o'clock, which is an hour before his parents start their jobs. As soon as Toby thinks all the work is over, he remembers all of the homework his teachers have burdened him with, and the three exams he has to study for. As Toby is still doing homework, he notices his parents relaxing on the couch, glancing at their golden paychecks for their “hardworking job.” Toby sighs to himself and knows if he is lucky he can get a paycheck in 7,300 days from now.…

    • 924 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    Fair Compensation Essay

    • 387 Words
    • 2 Pages

    Compensation is a method used to balance a fiscal budget and attract, develop, retain and reward high performing staff through wages. Company leaders use compensation to make sure that each employee has objectives supporting personal development while staying aligned with team and company direction. The company wants to ensure the employees have a clear understanding of these objectives and how they are doing against them so they can adjust immediately if necessary. Leaders must find the best effective compensation plan against the budget and local job market restraints to maximize motivation and retention. Company leaders should provide clear communication of objectives and results so employees understand their objectives, results and compensation.…

    • 387 Words
    • 2 Pages
    Decent Essays
  • Superior Essays

    The plans could start positive relationships between employee perceptions of pay for performance and satisfaction with pay, which of course would increase retention. Several studies suggest that individuals are more attracted to organizations with pay systems that rewards the individual employee for his or her own merits rather than group efforts. With the increased attractiveness of the company the quality of potential employees would potentially increase. 4) To realize the effects of their efforts for the use of pay-for-performance plans a company must adhere to several conditions. The most important condition is defining performance.…

    • 885 Words
    • 4 Pages
    Superior Essays