Since the beginning of the labour relations, money has been the most common of kind of incentive used by the employers around the world. These were rewards paid to employees if their production exceeded a predetermined level. It has always been efficient through many years; moreover, this form of incentive is especially popular in underdeveloped countries, particularly in the lowest levels of the organisations. In addition, the popularity of these incentives was based on that they were the easiest way to recognize the labour of one or more employees, because it didn’t need big studies or any other effort by the employers. For instance, if a boss felt pleased by the work of an employee, it did not find out about its necessities and simply had an amount of money and was given it.
As the organisation were growing and being developed, the employees and their necessities too. In the middle of 50s, money like incentive started to lose effectiveness, the use of traditional rewards was declining in the developed countries for many reasons, among them we have:
First, money provides a limited reinforcement on the behaviour, since, as soon as it is spent, it fades of the memory of the worker. Usually a few weeks later they do not remember the incentives and the wished effect is not obtained. Also, the incentives by reward occasionally can be unfair, due to the lack of a real measurement between the effort of the workers and the amount of the money for the reward. Furthermore, this kind of incentive can make antagonisms between different departments in the organisation, or also, between its hierarchical levels. Since all the department and levels are involved in the production process, seldom the reward is distributed between all of them.
REWARDING EXCELLENT EMPLOYEES Modern business world is highly competitive in every aspect. Today even employers have to find new original ways to reward outstanding employees, because only decent incentives will keep the level of their performance high and attract new talented people to work. And if you think that salaries and extra payments are original and highly motivating, you are, ...
Likewise, the use of this form of incentive, alter group dynamics, because the workers try that its department or hierarchical level outstanding more than the others departments, and in some cases to achieve it, damage the job of the others and consequently the teamwork. Regularly they only think about theirs individual cash gain and often damage the well going of the process and forget the objective of the company.
Generally, the reward is not immediate, the time delay between the goal is achieved and the time of the reward is given, make the employees feel upset and insecure to get the incentive and occasionally decrease the quality of their work.
Finally, another disadvantage to use money as an incentive is the possibility that this practice could become a habit for the workers; therefore, they could feel downhearted seeing as they do not receive any reward despite to have increased their productivity and improved their performance. This it would be able to bring a contrary effect and deteriorate the situation of the company.
With the development of the modern administration, other ways of incentives have been developed, which are better ways of encouraging employees to work hard, hence, these are being more productive than money and allow employers to use money just on specials and very important occasions, among them we have:
The first new incentive is recognition. There are many ways to give recognition to the performance of employees, these are: The supervisor personally congratulates the employee who did a good job. Also the supervisor can write a letter of recognition or personal notes for good performances. Moreover, the manager can publicly recognize the employees for good performance or in last instance he can show appreciation for some accomplishment such as plaques, diplomas and trophies. Also, Is important that presentation of this kind of incentives has to be preceded by a celebration. In fact, the celebration in this case is an opportunity for the workers can enjoy the accomplishment, so that, they will be able to talk about how they got the goals, and the incentive will keep in their memory and it will be more valuable.
The purpose of incentive schemes for executives is to align their objectives with those of the owners of the company; this is what people refer to as solving the principal-agent problem. In a company, shareholders are principals and managers are agents. The main argument in favour of stock option plans is that they give executives a greater incentive to act in the interests of shareholders by ...
Another incentive, which has been very popular, is the “Gimmick”. This is the name usually used to talk about a small or inexpensive product or merchandise such as caps, tee shirts, coffee mugs, folders, notebooks, and ballpoint pens with the logo and colours representatives of the firm. In addition, these incentives work very well because they have a low cost and keep the employees identified with the company, its vision and objectives. For example, in 1991, RCI (Resort Condominium International) implemented a “gimmick” program for superior performance and improved the spirit of its employees. Furthermore achieved to reduce the time of its processes in 40%, the program was considered a success.
Feedback is another new concept developed by an expert in the management of human resources, and it consists on constantly to let know to the employees what supervisors think about their work. This must be made forming a chain of information from the highest level at the lowest level of the organisation. This incentive make the workers feel that they exist and the work they make is considered important by their supervisors and all the things that do are important for the company.
And finally, it should be mentioned other very important forms of incentives, which are called intangible. These are known as: facilities for the acquisition of a house, a vehicle, medical insurances, travel, etc, which also have a positive effect on the behaviour of the workers, since they feel protected by the company, in addition, are more grateful and show loyalty towards it, at the same time they feel involved with it.
To summarize, in my opinion it is possible to say that money will always continue being a form to stimulate employee motivation, but no longer with the same effectiveness as in the last 50 years. The time to change has come for managers to consider improve their methods of incentive, these instead money can have greater impact in motivating more people and in helping to reinforce more formal organizational systems. Money has to be used at the moment to complement new and modern methods developed in order to improve the motivation of the personnel, and as a result this increase the productivity which means greater benefits for the company.
How would I go in describing this episode in my life? Working at a company for 4 (four) years, I thought that after having such a long time at a company it would be somewhat difficult to be fired or laid off from. Roettele Industries was the first company where I have worked at for a long period, and grown. When I started working there I was only 19? (neigh teen and a half) and at the age of 24 ( ...