Financial incentives i.e. monetary reward will help to satisfy basic needs identified by Maslow, Taylor and Hertzburg. Reward is a wider concept than pay. It includes pay, remuneration and compensation and represents a portfolio of managerial practices where financial and non-financial elements are flexibly directed at enabling and rewarding employees who add value in the interest of competitive advantage. Since employees are considered to be a valuable assets for modern business. These are the financial incentive available for workers:
Base pay
Which can be expressed as an annual (salary), weekly and hourly rate
Additions to base pay
Individual performance related pay
Bonuses for successful individual, organizational or team performance
Incentive payment for reaching target levels of performance
Commission related to sales generated
Service related to pay or increment for each year of service
Skill pay
Competence related pay, linked to the level of competence
Allowances for shift working, call outs
The sum of base pay and additions represent the total earnings of the employee.
However motivation and thus performance will also be determined by satisfaction of other needs. As identify by Maslow, Herzberg among others. “Human being has other needs that will have to be satisfied by other form of incentives”. Non-financial reward includes any rewards that focus on peoples’ needs for achievement, recognition, responsibility, influence and personal growth. These are some of the non-financial reward available:
Contract, which fulfil the need of security of work
Canteen and social club, which fulfil the social need
Promotion, which satisfy the need of self-esteem.
Among others
Furthermore there is job satisfaction, i.e., job rotation, job enlargement and job enrichment, which help to satisfy self-esteem and self-actualisation needs by identify by Maslow. They give more responsibilities to workers.
Job rotation. This involves the systematic and planned movement of employees from one job to another to provide them with variety and stimulation. It increases the experience of employees and provides for individual development. In itself, job rotation provides some enrichment to work.
Job enlargement. This involves a redesign of the job so that a series of tasks is combined into a new, broader job that gives variety and challenge to employees. By increasing the scope of the job, the sense of wholeness of the job will increase, thereby motivating the worker dong that job. However, job enlargement should not result in over-burdening of the worker
Job enrichment. This is defined as a job designs that incorporate achievement, recognition and other high level motivators. In other words it means increase job satisfaction as a result of greater autonomy and participation in the process of design making. Herzberg suggested 7 principles of job design:
A limited removal of control but the retention of accountability
Greater emphasis on accountability
Development of grater expertise by specialisation
A unit of work that is complete in itself
Increased in authority and responsibility
Feedback on issue that had previously only been available for supervisors
Increased complexity within tasks to make them more demanding and rewarding
Financial reward is an important but to motivate worker and want them to be more efficient and productive we should care for their other needs identified by Maslow and Herzberg, then they will corporate to the rise in profits and improvement in profitability situation.
