Perks: Financial Incentives

Financial perks

A financial incentive program is a payment mechanism which is used to encourage productivity. They are designed to increase production while at the same time inspiring employee loyalty. They are typically given in addition to some kind of base salary, although this salary may be relatively low compared depending on the financial incentives available. Financial incentives not only help increase productivity but also create enthusiasm towards work while enhancing commitment and dedication in work performance. By offering financial incentives, employers can get more production out of their employees without having to boost their base salaries. A chance to earn a reward or more money is a powerful motivator for employees.

Advantages to Employees

Financial incentives offer many advantages for employees. Obviously, by receiving additional compensation for reaching a certain goal, employees have the chance to make more money than their base salary. This kind of program rewards employees who work extremely hard. Financial incentives can also result in situations where employees may be able to earn a substantial income, especially if there is unlimited compensation. For example, a salesperson who works on commission with various incentives may be able to earn more money than a salesperson on a fixed salary. This kind of program encourages hard work and really rewards employees who put time and effort into their job. It also creates increased flexibility. Because financial incentives are based on performance, typically employees can set their own schedules in order to reach these incentives. There are some downsides to these plans, however. It can discourage teamwork, especially if the financial incentives are available to only one person. This can also create competition, however, which can be a good thing. Some employees perform much better if there is competition. There can also be built in inequity, if the financial income is offered based on a percentage of the employee’s base income. Since employees have different salaries, this could make the financial incentives higher or lower for various employees.

Advantages to Employers

While financial incentives offer fairly obvious advantages for employees, there are also many advantages for employers who offer this kind of program. One big factor is motivation. By making financial incentives available, employers hope to encourage motivate their employees and gain more production from them. This benefits the company, which thrives when more revenue is generated or more units are produced. This is especially effective if the positions have a relatively low base salary but offer the opportunity to earn much more by meeting objectives. Increased productivity also means fewer workers are needed to achieve certain goals, thus reducing the company’s labour cost. Incentive programs also help companies make improvements, particularly in areas of weakness. Perhaps companies offer a safety incentive program, which rewards employees who follow the necessary safety procedures. This allows employees to focus on the proper safe working conditions and procedures, increasing overall awareness, while at the same time rewarding them for doing so. Lastly, financial incentives create better retention for companies. High achieving employees who reach the financial incentives will be happy with their work environment and income, and thus will be more likely to stay as opposed to exploring other employment opportunities.

Pros & Cons

When looking at possible job opportunities it is always a good idea to write down a pros and cons list. This can help you to determine what aspects of the job you might like and what aspects you may want to change.

Some important job aspects to consider include possible travel, team outings, casual attire, flexible hours, working from home and more.

Workplace Culture

A workplace culture can have a big impact on your everyday life. If you enjoy work you will be more likely to perform better and stay interested in the tasks at hand.

Some of the ways that companies today are helping to foster a positive work environment is to allow employees access to free food and drink, showers, gym memberships, nap areas and gaming rooms.