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Human Resources Incentive Schemes and Motivation.

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Introduction

Human Resources Incentive Schemes and Motivation Introduction Motivation A business, as we know, needs land (a site), capital (factories, machinery, tools) and labour (workers) before it can produce anything. The most important of these factors is often quoted as being labour - the human resources that are needed for a business to be able to produce a good or service. Human resources (workers) need to be paid, to feel secure, to be valued, to be praised, to be promoted. Businesses that have workers who work not just for money but because they enjoy their work and feel valued are likely to be more efficient than other businesses. Absenteeism will be lower as will lateness and illness. Motivation is the way in which workers can be encouraged to do a good job. Motivation is concerned with the strength and direction of behaviour. A well-motivated person is someone with clearly defined goals who takes action, which he or she expects, will achieve those goals. So motivation is much more than just pay. This means that to a business, motivation is: * finding ways to get workers to work harder or more efficiently by: 1. showing that they value workers 2. providing ways for workers to succeed 3. providing a structure for promotion. Motivational Theories There are several theories as to what its is that makes people work harder. The best known are those of Maslow, McGregor and Herzberg. * Maslow's Theory A. H. Maslow (1908-70) was an American psychologist who said that people worked in order to gain certain things. Firstly, they need to satisfy their survival needs; this means that they must either grow their own food or earn sufficient money to be able to buy the basic necessities of food, clothing and shelter. ...read more.

Middle

Advantages The advantages of incentive plans ard many which make it preferable to other methods. Here are some of the advantages of an incentive plan: 1. Like all the others it motivates employees: but because it does so in many ways and covers methods that include everyone it the most successful. 2. It focuses employee efforts on specific performance targets. e.g. if the a higher sales are achieved then a higher compensation is given. This means that the employee is always working towards achieving better standard since there is no limit to their compensation. 3. This fits it with the fact that the compensation is related to the result. 4. It fosters team work when payments to individuals are based on team result. This means that workers are motivated to work as team knowing that they are rewarded as a team. They encourage each other to work because if one falls it affects everyone else. 5. Incentives are only paid of performance is improved. This makes success the main target of the workers because with it come the incentives Requirements The requirements for a successful incentive plan are quite a lot compared to other schemes but it is simply worth it since the benefits are enough to fulfill any requirements. The requirements for successful incentive plan are: 1. Employees must have some desire for the plan. If the plan is not attractive enough for them to work towards it then the whole plan is basically pointless since the incentive isn't satisfactory enough or worth the effort. 2. Employees must be able to see a clear connection between the incentive payments they receive and their job performance. ...read more.

Conclusion

One) Profit sharing: Based upon the profit of the enterprise the employee gets a greater pay in addition to the base pay. This makes employers feel like partners it also motivates commitment for employees. Two) Employee Stock Ownership: stock plans in which an organisation contributes shares of its stock to an established trust for the purpose of stock purchases by its employees. This is very beneficial to the business since now the money is not only the owner's but also the employees. This increases the employee's pride of ownership which in turn increases productivity. Moreover when employees leave the organization or retire, they can sell their stock back to the organization or sell it to the open market. Conclusion After exploring the different methods of motivation; pay, personnel function, perks, appreciation and incentives, I discovered that incentive schemes are the best motivation schemes since they cover plans to motivate individuals, teams, groups, managers and employees. This way it leaves no one out and does make everyone feel part of the "business family". Moreover it has a mixture of all the other methods to not only motivate the employees in terms of money but also psychologically. However incentive plans do have their disadvantages but there advantages outnumber them. Their main advantage is that they involve employees in the success of the organization - success that they have played a role in. I also discovered that it is important that HR incentive schemes are not seen as an entitlement but should be seen as a method of motivation and that it is one of the advantages of being part of the company "family". Along with that come other requirements that are necessary for the success of the incentive schemes, if they are not fulfilled the plans fail. ...read more.

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