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Explain the characteristics of financial incentives.

Explain the characteristics of financial incentives.

Answers

Kavungya
1. Financial or monetary incentives are meant to satisfy those needs which money can buy. The needs for food, clothing, and shelter can be fully satisfied by money, but the needs for security, social affiliation and status can be partially satisfied by money. But non-pecuniary incentives are meant for the satisfaction of those needs, which can't be satisfied by money. The examples are higher level needs such status, ego, sense of responsibility, career advancement, autonomy etc.
2. Financial incentives are tangible, i.e. visible and, measurable. They have a direct effect on the organization and the members. But non-financial incentives are intangible and they a have an indirect influence on the organization and the members.
3. Financial incentives are determined by reference to several factors such as job
evaluation, cost of living trends, fringe benefits offered by competitors, agreement between the employers and employees, etc. Non-financial incentives are based on the nature of jobs, strength of aspirations and urges of employees and behavioral orientation of management.
4. Financial incentives are generally used to motivate workers and other non-managerial employees. But non-financial incentives are used to motivate managerial and other higher-level personnel. They are also used to supplement and support the pecuniary incentives in the organization.
Kavungya answered the question on March 26, 2019 at 13:26

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