Everything ultimately revolves around money. It is the best source of motivation. This article will highlight what are monetary incentives for an employee that he or she can expect from a company in the long term. An employee when starts his or her new job. He or she expects a job according to the experience he has been exposed to and the learning from the school and college. These expectations gradually increase with more experience in work unless he or she changes the field altogether.
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What are Monetary Incentives
Basically they are money. They motivate an individual to work and gives a purpose to all the work he/she does. These monetary incentives are the source of their motivation and they drive them to work more and hard. They give them recognition. They are also given to encourage employees to stay at their company for a longer period. These monetary incentives ultimately take the form of hard cash. It is given to an individual on the basis of his/her knowledge, skills, and other attributes that the company finds useful. These incentives come in different forms, let us know more about it.
Different Forms of Monetary Incentives
There are different forms of these incentives. Every form has its own time at which the company offers. For example, a salary is offered to an individual on a monthly basis. Let us get into the details of these forms of monetary incentives.
Of course, salary is the most basic form of monetary incentive. They are generally offered either on a weekly basis or on a monthly basis. It can demotivate and employee If any month the salary is skipped. This will directly affect the work he/she is doing and then impact the organization.
A bonus is another form of incentive that motivated the employee. This should be given when an employee performs extremely well and it benefits your company too. This will show that the company recognizes what he/she is doing. This is very beneficial because this encourages the employee to maintain the performance level and it can also raise the performance bar among the employees.
3. Stock Options
Another kind of monetary incentives. Stock options mean you are giving some part of your company stock to an employee. He/she can then sell the stock or keep the stock according to their wish. Selling the stock will give them the money. The value of the stock determines the money value. Generally, these incentives are given to higher-level employees. This is also a performance-based incentive.
This doesn’t mean you are paying the employee immediately but this confirms that the employee’s salary is now increased. This is the most effective monetary incentive because unlike others this incentive becomes permanent. Giving promotion is a thoughtful process. This is because increasing the salary permanently is a big step and the employee’s responsibilities also increase with it.
There are different kinds of allowances that can motivate employees. These allowances will motivate the employees in different ways because it saves a certain amount of money going out from their pocket, which can boost the motivation and help them. Hence allowances are very useful monetary incentives. These allowances can be:
- Travel Allowances – The company covers the travel cost of the employee.
- Fuel Allowances – The company provides allowances for the fuel.
- House Rent Allowances – The company pays the rent of the employee’s house.
These were the different monetary incentives that a company can provide to its employees. Motivated employees work harder and with more dedication. Compromization in monetary incentives can demotivate the employees. The other type of incentive is non-monetary incentives. These are not the physical kind, they are more of how an employee feels. Such as a good employee portal makes the work easier for the employee. Have a look at this employee portal to know-how. Safeway – Direct2Hr.