Incentives: Characteristics, Types And Application At Work
Incentives are stimuli that make a person more motivated to work, study, carry out a certain action, etc. They are used in a multitude of areas.
In this article we will talk about the incentives applied in the business sector: labor incentives. We will learn about its definition, its fundamental characteristics, the different types of incentives that exist and how they work. On the other hand, we will see what functions they have in addition to increasing the motivation and performance of workers.
An incentive can be defined as anything that drives a person to improve in certain aspects or tasks. It can also be considered as a reward or benefit after achieving something ; That is, it is something that motivates the person to do a certain action better or faster.
Incentives can be used in different fields and disciplines (education, psychology, therapy…); however, here We will talk about the incentives that are applied in the workplace In this area they are also widely used, especially to achieve an increase in the person’s performance, as well as their productivity.
That is, they are aimed at achieving better results in the organization, in addition to an improvement in the well-being or satisfaction of the worker and a better work environment. For example, an incentive would be to offer an extra financial bonus for every “X” number of sales.
Its origin
The first author who began to talk about work incentives was Frederick W. Taylor, American industrial engineer and economist , when the Scientific Organization of Labor movement began in the middle of the 19th century. Taylor argued that workers’ effort increased when they received incentives based on their productivity.
On the other hand, the Scientific Organization of Work that Taylor created together with his collaborators, refers to a system of work organization consisting of dividing the tasks of the production processes.
This system, in reality, was typical of industrial organizations (this is understood as Taylor was an engineer), and its objective was to increase the productivity of workers. Thus, as we have already mentioned, Taylor ended up seeing, after applying and studying his system in different conditions, that incentives made workers work harder and, therefore, productivity also increased.
Characteristics
Work incentives can be of different types, as we will see later. However, they all share the same goals: improve worker performance and productivity as well as their personal satisfaction within the company.
This satisfaction will translate into an increase in your motivation and will make you come to work happy; The company is interested in all of this, because, on the one hand, it is looking out for the well-being of its workers, and on the other, it is looking out for the business. That is, both parties win.
On the other hand, not all incentives serve the same way for all workers; that is It depends on which worker, one incentive will be effective and another will not Thus, while one worker may be satisfied with a salary increase as an incentive, another will be satisfied with more vacation days, and another with more social benefits, etc.
That is to say, each person will use one or another incentive to motivate themselves and increase their productivity at work. That is why the businessman or the Human Resources professional must know detect these different needs and motivations in your workforce in order to be able to allocate to each worker the type of incentives that are most effective in each case.
Work incentives can be of different types. There are different classifications, but the most generic and accepted is the one that divides them into economic and non-economic incentives:
1. Economic incentives
These are incentives that entail economic or monetary remuneration. Examples of them are salary increases, extra pay, commissions, bonuses … That is, everything that implies a salary increase or extra money. These are the most classically used incentives.
They can have a significant impact on the worker, as well as their productivity, especially if their economy is not particularly good. However, as we have seen, not all incentives serve the same purpose for all workers.
2. Non-financial incentives
Non-economic incentives include all those measures that improve the worker’s working conditions
These types of incentives are much more varied than the previous ones, and include a wide variety of examples (tangible and intangible), such as: restaurant tickets, contributions to pension plans, life insurance, flexible hours, medical insurance, transportation assistance , dining or daycare services for children, aid to continue studying (training), fruit days at the office, etc.
Non-economic incentives are increasingly used by companies and offer an extra attraction to the working conditions of the position.
Application and functions at work
We have seen how work incentives can be of different types, and how they are not equally effective for all people; Thus, they have to be adapted to the needs and preferences of each worker to be effective.
But what exactly is achieved through the administration of effective work incentives? It is much more than a simple improvement in worker productivity Let’s see its most notable functions:
The main purpose of incentives, as we have been highlighting, is to enhance productivity, through increasing worker motivation.
2. Talent attraction
However, the purpose of incentives goes much further, and they can also be very useful to attract good profiles to the company. In addition to attracting them, they will also serve to retain them and that the staff is competent.
3. Favor the promotion system
Incentives, by attracting good profiles, also enhance the company’s promotion system, since workers with the greatest potential will advance through these promotions, without going to work for the competition.
4. Filter out workers who don’t fit
On the other hand, the incentives They also allow us to discern and filter which workers fit best with the company and which do not since workers who feel in tune with the company’s dynamics and philosophy (that includes its incentives) are more likely to continue working there.
5. Improve the work environment
If workers are comfortable in the company (this is partly due to the administration of incentives), it is more likely that the work environment will be more relaxed, more pleasant and closer.
6. Reduce work absenteeism
It has been proven that being motivated at work reduces absenteeism, sick leave, etc., and this motivation may be due in part to the type of incentives that the company provides to its workers.
7. Reduce costs and workplace accidents
Finally, studies have also shown how incentives can influence the reduction of costs and workplace accidents in the company, in addition to errors in workers.
