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Financial Incentives may not always Motivate

Management experts believe that offering financial incentives to employees as part of common management practice may not always work as motivator. The experts suggest that this practice may fetch adverse results. Experienced management professionals argue companies should never use financial incentives as behavior driving tool. They recommend offering incentives in recognition of the brilliant performance of the employees. Employers can also extend incentives for sharing the success of the company.


Individual incentive may not be effective for productivity growth


The practice of offering individual incentive to employees is very high among business organizations. Study in this respect reveals that businesses offer incentive in order to improve productivity and competence among the employees.


Sometimes organizations are convinced to pay incentive to the employees as compensation means. These business organizations are told that through this practice, they can solve the entire organizational and management-related crisis. However, experts think the other way. According to them, organizations are misled by this strategy.


Apart from the efficacy of incentives, experts also doubt about the validity of offering benefit grants to top-level executives of any business organization. Experts argue that if more benefit grants are offered to senior executives, the companies would require to restate the financial statements as many times.


No incentive at the cost of organizational culture


There is also a general assumption that runs deep in organizational businesses. According to this assumption, employees are mainly motivated towards production by incentive offer. People also believe that organizations have high trust in financial rewards. This assumption can be true to certain extent. But, at the same time, there must be a positive organization culture in the workplace. For many, positive organizational culture is far more effective than the financial rewards.


Generally, it is seen that financial rewards are brought into the notice of everyone. These rewards serve as an occasion to celebrate. People come together and share the success. All this is acceptable. But no one would favor to make the incentives large enough that they should twist the behavior.


Building organizational culture is more important


Experts believe that financial rewards and pay system can be changed very easily and quickly according to the employer’s discretion. But changing organizational culture, the employees’ skills and knowledge, their beliefs and mindsets and their ability to communicate and work is a very daunting task. In the present scenario, financial incentives are nothing short of hallucination, which is being wrongly used as a quickie.

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