types of incentives

1. Presented By:
Gargy Sharma
Rudrakshi Singh

2. Anything that can attract an employee’s attention and motivate
them to work can be called as incentive. An incentive aims at
improving the overall performance of an organization.
Incentives can be classified as direct and indirect compensation.
They can be prepared as individual plans, group plans and
organizational plans.

3.  Higher efficiency and productivity
 Improve the work-flow and work methods
 Hardworking and innovative
 Supervision costs can be reduced
 Help establish positive response in an organization
 Improved standard of living
 Other benefits:
Reduced turnover
Reduced absenteeism
Reduced lost time.

4.  Piecework Plans
It is the oldest and still widely used incentive plan.Wages
are determined by multiplying the number of units
produced by an employee in a unit of by the rate per unit
 Merit Pay
It is the salary increase that the employee receives for his
performance. The increase becomes part of the base
salary
Types of Incentives

5.  Bonus
The additional compensation payment made to employees, it is
a one time payment and do not become part of the employees
base pay, and hence is less costly
 Spot Awards
These cash payments provide immediate recognition of
accomplishments by staff below the managerial level
 Special Non Cash Recognition
These may be merchandise, such as gift certificate. They are
usually awarded to those below management level

6. Compensation incentives
It include items such as raises, bonuses, profit sharing,signing
bonus, and stock options
Recognition incentives
It include actions such as thanking employees, praising
employees, presenting employees with a certificate of
achievement, or announcing an accomplishment at a company
meeting
Rewards incentives
It include items such as gifts, monetary rewards, service awards,
presents, and items such as gift certificates. An additional
example is employee referral awards that some companies use to
encourage employees to refer job candidates

7. Appreciation incentives
Includes such happenings as company parties and celebrations,
company paid family activity events, ice cream socials, birthday
celebrations, sporting events, paid group lunches, and sponsored
sports teams
Remunerative or Financial Incentive
They are said to exist where an agent can expect some form of
material reward – especially money – in exchange for acting in a
particular way
Moral Incentive
They are said to exist where a particular choice is widely regarded
as the right thing to do, or as particularly admirable, or where the
failure to act in a certain way is condemned as indecent

8. Coercive Incentive
They are said to exist where a person can expect that the
failure to act in a particular way will result in physical
force being used against them (or their loved ones) by others
in the community – for example, by inflicting pain in
punishment, or by imprisonment, or by confiscating or
destroying their possessions
Natural Incentive
Such as curiosity, mental or physical exercise, admiration,
fear, anger, pain, joy, or the pursuit of truth, or the control over
things in the world or people or oneself.

9. Personal Incentives
It motivate an individual person through their tastes, desires, sense
of duty, pride, personal drives to artistic creation or to achieve
remarkable feats, and so on
Social Incentives
The situation faced by any individual in a given position within a
given society – which means mainly examining the practices,
rules, and norms established at a social, rather than a personal,
level