Monetary incentives include regular salary increases linked to performance, productivity-linked wage plans, bonuses for exceeding targets, profit sharing when profits are high, stock options, retirement benefits, perks, and commissions for sales employees. These financial rewards motivate employees by satisfying physiological, social, and security needs and incentivizing high performance.

1. Monetary or Financial
Incentives Compensation
Management

2. Monetary or Financial
Incentives
• The reward or
incentive
which can be
calculated in terms of
money is known as
monetary incentive.

3. Monetary or Financial
Incentives
• These
offere
d who
incentives are
to employees
have more
physiological, social
and security need
active in them.

4. Monetary or Financial
Incentives
• Pay and allowances.
– Regular increments in
salary
every
yea
r
as
goo
d
som
e
allowance
motivators.
organization
s
and grant of
act
In
pay hikes
an
d
allowances are directly
linked with the performance
of the employee. To get
increment and allowance
employees perform to their
best ability.

6. Monetary or Financial
Incentives
• Productivity linked with
wage incentives.
– These are wage rate plans
which offer higher wages for
more productivity. Under
differential piece wage
system efficient workers are
paid higher wages as
compared to inefficient
workers. To get higher
wages workers perform
efficiently.

7. Monetary or Financial
Incentives
• Bonus.
– Bonus is a onetime extra reward
offered to the employee for
sharing high performance.
Generally when the employees
reach their target or exceed the
target then they are paid extra
amount called bonus. Bonus is
also given in the form of free trips
to foreign countries, paid
vacations or gold etc. some
companies have the scheme of
offering bonus during the festival
times.

8. Monetary or Financial
Incentives
• Profits sharing.
– The organization offer share in the
profits to the employees as a
common incentive for
encouraging
the
employee
s
for
efficiently. Under profits
workin
g
sharin
g
schemes generally the
companies fix a percentage of
profits, and if the profits exceed
that percentage then the surplus
profits is distributed among the
employees. It encourages the
employees to work efficiently to
increase the profits of the
company so that they can get
share in the profits.

9. Monetary or Financial
Incentives
• Co-partnership/stock option.
– Sharing the profit does not
give right to the
Many companie
s
in
manageme
nt
or
ownership
employees.
offer share
participatio
n
in
manageme
nt
along with share in profit to its
employees as an incentive to
get efficient working form the
employees. The co-
partnership is offered by issue
of shares on exceeding a
fixed target.

10. Monetary or Financial
Incentives
• Retirement benefits.
– Some organizations offer
retiremen
t
pension,
benefits such
as
provident
fund,
gratuity etc. to motivate
people. These incentives
are suitable for employees
who have security and
safety need.

11. Monetary or Financial
Incentives
• Perks/ fringe
Benefits/ perquisites.
– If refers to special
benefits suchas
medical facility, free
educatio
n
housing
for
children,
facility etc.
these
benefits are over and
above salary.
These extra
benefits
are
relate
d
with the
of the
performanc
e
employees.
.

12. Monetary or Financial
Incentives
• Commissi
on. is the
common
–
Commissio
n
incentive
employees
offered to
working
unde
r
department.
Generall
y
sales
the
sale
s
personal get the
basic salary and also with
this efforts put in by them.
More orders
mean
more
commission.