Financial Incentives Essay Example | Topics and Well Written Essays - 500 words - 23

Financial Incentives - Essay Example Financial incentives put a value on the accomplishment made by the member of staff. It serves to encourage brilliant and capable but unenthusiastic employees thus raising their efficiency. In addition, it creates healthy competition among workers thus increasing the turnover. It motivates an employee to focus on the target set. It leads to the attachment of the individual to the company, therefore, growing their level of commitment. Moreover, it links additional productivity with added pay. The other merits of financial incentives are to serve as the machinery of attracting other expert workforce and motivating workers to put forth extra effort. However, financial incentives can sometimes be small and demoralizing if not earned. It can also have a negative impact on unenthusiastic employees, who will fail to meet the set targets. Furthermore, it causes rifts and divisions among the workers, which will in turn negatively affect the productivity, hence the overall turnover of the company. In addition, it may lead to discrimination of the under performers and ineffective evaluation of individual skills since it is based on performance. Lack of training of supervisors on ways to determine the performance, may lead to the incentives not being standard, which leads to discontent among the employees. The downside of offering financial incentives to achieve customer satisfaction is the employees focus is short term, which does not reflect the company’s long-term goals. Moreover, it does not offer a system that measures the value of the employee’s skills. The focus on short-term goals causes the discounting of potential income of business at an elevated rate than is best for the business. The other incentives apart from financial incentives the company can offer include gift certificates, plaques, individual travel program, merchandize prizes, commissions, stocks and shares in the company and achievement recognition of the employees. The company has been in the market extensively to develop goodwill repute for quality, q. This repute is based on the quality of service and customer care distinctiveness.