Explain the advantages and disadvantages of using financial incentives PDF

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Explain the advantages and disadvantages of using financial incentives...

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Explain the advantages and disadvantages of using financial incentives in a program of this nature. What, if any, potential problems might arise if people are given money for achieving customer satisfaction goals? What other types of incentives might be considered? The indeed.com has definition the financial incentives: “Financial incentives are a type of employee incentive that companies provide to encourage performance and productivity and to recognize achievements. Employers use financial incentives to motivate teams and staff to exceed expectations or otherwise take part in tasks or activities that employees may not normally perform” Financial incentives may result in both advantages and disadvantages. The fundamental benefit of financial rewards is that they are extremely motivating. The importance of rewards and recognition as a source of motivation has been very well discussed in (Master Thesis in Business Administration, 15 ECTS Motivation by monetary rewards - A study about motivation and performance-based salary increase) The study's most apparent finding is that both low- and middle-income employees perceive performance-based salary increase to be a significant factor in their motivation at work, although their explanations differ significantly. Many low-income interviewees were more concerned with the cash amount of the raise, but most middle-income interviewees regard a raise as vital feedback and recognition from their boss. The findings of this study also show that low-income employees are more willing to increase their efforts and performance than middle-income employees if they know they will receive a significant pay raise in return. This will improve performance and subsequently customer satisfaction. Financial incentives have a number of benefits for both employees and the company as a whole. If salary increases and cash bonuses are allocated properly, they can be a win-win situation for both employees and Drain Flow. However, Employees may not be able to concentrate on corporate goals and instead focus on getting the monetary reward, which is one of the drawbacks of financial incentives. Organizations will face greater compensation expenditures as a result of the increased incentives. Finally, financial incentives increase workplace competition while reducing competition outside the company. Drain Flow can establish employee training and development as a strategy to improve job satisfaction without relying on financial incentives. Other types of Incentives that can be considered are A dinner, store coupon, holiday trip or a free parking place would also give an exciting experience to the employees.

Create a specific plan to assess whether the reward system is working. What are the dependent variables that should change if the system works? How will you go about measuring success? Every week, Lee Reynaldo must evaluate the consumer surveys. It's critical that she's kept up to date on the team's progress as well as customer feedback. An important aspect of evaluating the efficacy of a financial reward system by comparing the expenses to the desired outcomes. Because the desired outcome in this situation is job satisfaction, the company can use employ workforce surveys to gather data. Compare the measurement of crucial criteria prior to the financial reward incentive's implementation with the measurement of the same criteria after the implementation.

Examining whether any additional variables not included in the study may have influenced the outcomes. Searching the management literature to determine how successful the incentive plan has been in other companies working in comparable circumstances. Measuring outcomes before and after the deployment of the incentive system over a period of time. Changes in labor turnover and company key performance metrics such as employee attitude, staff productivity, customer complaints, and overall business profitability will be monitored by DrainFlow. As previously stated, the easiest approach to assess the success of a reward system is to compare the state of these variables prior to implementation with the state of these variables after implementation.

Reference -Master Thesis in Business Administration, 15 ECTS Motivation by monetary rewards - A study about motivation and performance-based salary increase -https://www.indeed.com/career-advice/career-development/incentives-types...