Different Incentives
Business Management: IB Diploma, topic 2.4.5
Financial Incentives
Financial methods of motivation include strategies which impact upon or influence the financial benefit employees receive from working within a business.
Payment
- Employees may be paid commission, which is a payment, usually based on the amount of goods an employee sells. Commission may be a percentage of sales made or can be a flat fee according to the volume of goods sold.
- For example, call centres often use commission to motivate employees. Using commission, employees may be paid a percentage of the revenue they make through securing sales.
Salary schemes
- Employees may be invited to take part in salary schemes. A salary scheme gives employees pension benefits usually based on their earnings and length of employment or membership of the scheme.
Performance-related pay
- Employees may be paid using performance-related pay. Performance-related pay is used to pay employees based upon their performance. Performance-related pay could be based on whether employees meet objectives or on how many products are made or sold within a period of time.
Non-Financial Incentives
Non-financial methods of motivation include strategies which do not directly impact upon or influence the financial benefit employees receive from working within a business.
Healthcare
- Employees may be given access to free private healthcare as a non-financial method of motivation.
Gym memberships
- Employees may be given access to gym membership as a non-financial method of motivation.
Child care
- Employees may be given access to free child care as a non-financial method of motivation.
Test yourself on Different Incentives
What is commission?
Which non-financial incentive would appeal to new parents?