ROLE OF NON FINANCIAL INCENTIVES

•    NON FINANCIAL INCENTIVES
MANAGEMENT PRACTICES AND ORGANIZATION BEHAVIOR/PRINCIPLES OF MANAGEMENT/BUSINESS MANAGEMENT

•    QUESTION:- NON FINANCIAL INCENTIVES ARE AS STRONG MOTIVATORS AS FINANCIAL ONES. CRITICALLY EXAMINE THIS STATEMENT AND DISCUSS VARIOUS NON FINANCIAL INCENTIVES AND THEIR ROLE IN MOTIVATION.?

•    SOLUTION

•    MOTIVATION HAS BEEN DERIVED FROM THE WORD”MOTIVES “ WHICH MEANS ANY IDEA,NEED OR EMOTION THAT PROMPTS A MAN INTO ACTION. RENSIS LIKERT HAS CALLED THE MOTIVATION AS THE CORE OF MANAGEMENT.BY MOTIVATING THE WORKFORCE,MANAGER CREATES WILL TO WORK WHICH IS NECESSARY FOR THE ACHIEVEMENT OF ORGANIZATION GOALS.

•    DALTON E MCFARLAND,” MOTIVATION REFERS TO THE WAY IN WHICH URGES,DRIVES,DESIRES,ASPIRATIONS,STRIVING OR NEEDS DIRECT,CONTROL OR EXPLAIN THE BEHAVIOR OF HUMAN BEINGS.

•    INCENTIVES AND MOTIVATION

I.            MOTIVATION MAY BE POSITIVE OR NEGATIVE. POSITIVE MOTIVATION: MOTIVATING THROUGH REWARD. NEGATIVE MOTIVATION ON THE BASIS OF FEAR/PUNISHMENT

II.            EXTRINSIC AND INTRINSIC MOTIVATION:-EXTRINSIC MOTIVATORS INCLUDE WAGES,FRINGE BENEFITS,MEDICAL REIMBURSEMENT ETC AND THESE ARE GENERALLY FINANCIALLY INCENTIVES.BUT INTRINSIC MOTIVATORS OCCUR ON THE JOB AND IT PROVIDE SATISFACTION . IT INCLUDE RECOGNITION,STATUS,AUTHORITY AND PARTICIPATION ETC

III.            IT MAY BE FINANCIAL AND NON FINANCIAL: FINANCIAL WHICH IS ASSOCIATED WITH MONEY AND NON FINANCIAL ASSOCIATED WITH INTANGIBLE INCENTIVES LIKE EGO SATISFACTION,SELF ACTUALIZATION AND RESPONSIBILITIES.

•    FINANCIAL AND NON FINANCIAL INCENTIVES

•    INCENTIVES MEANS AN INDUCEMENT WHICH STIMULATES ONE TO ACTION IN A DESIRED DIRECTION. IT IS OF TWO TYPES:-

I.            FINANCIAL INCENTIVES:-ARE MONETARY IN NATURE . IT IS BASICALLY FLOW OF MONEY FROM ORGANIZATION TO STAFF.

II.            NON FINANCIAL INCENTIVES:-THEY DO NOT ADD TO THE MONEY INCOME OF THOSE WHO RECEIVE THEM. IT IS IN THE FORM OF JOB ENRICHMENT,PARTICIPATIVE MGMT,PRAISE,OPPORTUNITY FOR GROWTH.

•    DIFFERNECE BETWEEN FINANCIAL AND NON FINANCIAL INCENTIVES

•    FINANCIAL INCENTIVES

a)       THEY ARE MEANT TO SATISFY THOSE NEED WHICH MONEY CAN BUY

b)       THEY ARE TANGIBLE AND HAVE DIRECT EFFECT ON THE ORGANIZATION AND MEMBERS

c)        DETERMINED WITH REFERENCE TO JOB EVALUATION,COST OF LIVING AND COMPETITOR'S PAY STRUCTURE

d)       USED TO MOTIVATE WORKERS AND OTHER NON MANAGERIAL EMPLOYEES

•    NON FINANCIAL INCENTIVES

a)       MEANT FOR SATISFACTION OF HIGH ORDER NEEDS LIKE STATUS,RECOGNITION ETC

b)       THEY ARE INTANGIBLE AND HAVE INDIRECT INFLUENCE

c)        ARE BASED ON THE NATURE OF JOBS,ASPIRATION AND PHILOSOPHY OF MGMT

d)       USED TO MOTIVATE MANAGERIAL AND HIGHER LEVEL OF PERSONNEL.

•    ROLE OF FINANCIAL INCENTIVES

I.            MONEY PLAYS A VERY IMPORTANT ROLE IN MOTIVATION. IT IS REALLY MOTIVATING FACTORS WHEN THE PHYSIOLOGICAL AND SECURITY  NEEDS OF THE WORKERS HAVE NOT BEEN FULLY SATISFIED. MGMT CAN USE FINANCIAL INCENTIVES FOR MOTIVATION.

II.            MONEY PROVIDES FOR THE SATISFACTION OF PHYSIOLOGICAL AND SAFETY NEEDS WHICH HAVE BEEN CALLED HYGIENIC FACTORS BY HERZBERG. HYGIENIC FACTORS INCLUDE WAGES,SALARY AND OTHER MONETARY BENEFITS.THEY DO NOT PROVIDE JOB SATISFACTION AND IN ORDER TO MOTIVATE SATISFACTION OF EGO,STATUS AND SELF ACTUALIZATION NEEDS MUST BE SATISFIED.

•    ROLE OF NON FINANCIAL INCENTIVES

•    MONEY IS NOT THE ONLY MOTIVATOR BECAUSE IT DOES NOT WORK FOR EVERYONE. WHEN THE BASIC REQUIREMENTS ARE SATISFIED WITH THE HELP OF MONEY AND THEN MONEY IS NO LONGER WORK AS INCENTIVE AND IT BECOMES THE MAINTENANCE FACTOR AS NARRATED BY HERZBERG. IN ORDER TO MOTIVATE THE EMPLOYEES ,MGMT CAN USE NON FINANCIAL INCENTIVES TO MOTIVATE THE STAFF.

1)       APPRECIATION OF WORK DONE:-IT WORK AS EFFECTIVE NON FINANCIAL INCENTIVES. WHEN THE MANGER PRAISES SOME ONE WORK IT BOOST THE MORAL OF EMPLOYEE AND ALSO SATISFY THE EGO NEEDS OF THE EMPLOYEE. BUT IT SHOULD BE USED WITH CARE BECAUSE IF MANAGER PRAISES INCOMPETENT WORKER THEN IT MAY CREATE RESENTMENT AMONG COMPETENT WORKERS

2)       COMPETITION

3)       GROUP INCENTIVES:-CREATES HIGH MORALE,TEAM SPIRIT AND INCREASE IN PRODUCTIVITY. WORKS MORE EFFECTIVE THAN INDIVIDUAL INCENTIVES

4)       KNOWLEDGE OF THE RESULT

6)       WORKER’S PARTICIPATION IN MANAGEMENT:-IT WILL SATISFY WORKER’S PSYCHOLOGICAL SATISFACTION THAT THEIR VOICES ARE ALSO HEARD.

7)       SUGGESTION SYSTEM

8)       JOB ENRICHMENT:-IT REFERS TO VERTICAL ENLARGEMENT OF A JOB BY ADDING MORE RESPONSIBILITIES AND OPPORTUNITIES AND GROWTH. IT WILL MAKE JOB MORE INTERESTING AND CHALLENGING.

9)       ROLE OF FINANCIAL INCENTIVES

10)   MONEY PLAYS A VERY IMPORTANT ROLE IN MOTIVATION. IT IS REALLY MOTIVATING FACTORS WHEN THE PHYSIOLOGICAL AND SECURITY  NEEDS OF THE WORKERS HAVE NOT BEEN FULLY SATISFIED. MGMT CAN USE FINANCIAL INCENTIVES FOR MOTIVATION.

11)   MONEY PROVIDES FOR THE SATISFACTION OF PHYSIOLOGICAL AND SAFETY NEEDS WHICH HAVE BEEN CALLED HYGIENIC FACTORS BY HERZBERG. HYGIENIC FACTORS INCLUDE WAGES,SALARY AND OTHER MONETARY BENEFITS.THEY DO NOT PROVIDE JOB SATISFACTION AND IN ORDER TO MOTIVATE SATISFACTION OF EGO,STATUS AND SELF ACTUALIZATION NEEDS MUST BE SATISFIED.