Incentives: characteristics, types and application at work

Incentives are stimuli that make a person more motivated to work, study, perform a certain action, etc. They are used in many fields.

In this article we will talk about the incentives applied in the business sector: work incentives. We will know its definition, its fundamental characteristics, the different types of incentives that exist and how they work. On the other hand, we will see what functions they have in addition to increasing the motivation and performance of workers.

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Incentives: what are they?

An incentive can be defined as anything that drives a person to improve in certain aspects or tasks. It can also be considered as a prize or a benefit after getting something; that is, it is something that motivates the person to do a certain action better or faster.

The incentives can be used in different fields and disciplines (education, psychology, therapy…); yet here We will talk about the incentives that apply in the workplace

. In this field they are also widely used, especially to achieve an increase in the performance of the person, as well as in their productivity.

That is to say, they are oriented to achieve better results in the organization, in addition to an improvement in the well-being or satisfaction of the worker and a better work environment. For example, an incentive would be to offer an extra financial bonus for each "X" number of sales.

Its origin

The first author who began to talk about work incentives was Frederick W. Taylor, American industrial engineer and economist, when he started the movement of the Scientific Organization of Labor in the middle of the 19th century. Taylor argued that the effort of workers increased when they received incentives based on their productivity.

On the other hand, the Scientific Labor Organization created by Taylor together with his collaborators, makes allusion to a work organization system consisting of dividing the tasks of the production processes production.

This system, in reality, was typical of industrial organizations (it is understood that Taylor is an engineer), and its objective was to increase the productivity of workers. Thus, as we have already anticipated, Taylor ended up seeing, after applying and studying his system in different conditions, that incentives made workers work harder and that, therefore, productivity will also increase.

Characteristics

Work incentives can be of different types, as we will see later. However, they all share the same goals: improve worker performance and productivity, as well as his personal satisfaction within the company.

This satisfaction will translate into an increase in his motivation and will make him come to work happy; The company is interested in all this, because, on the one hand, it is looking out for the welfare of its workers, and on the other, it is looking out for the business. In other words, both parties win.

On the other hand, not all incentives work in the same way for all workers; that is depends on which worker, one incentive will be effective and another will not. Thus, while one worker may be satisfied with a salary increase as an incentive, another will be satisfied with more vacation days, and another with more social benefits, etc.

In other words, each person will use one or another incentive to motivate themselves and increase their productivity at work. That is why the employer or Human Resources professional should know detect these different needs and motivations in your workforce, in order to be able to allocate to each worker the type of incentives that are most effective in each case.

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Guys

Work incentives can be of different types. There are different classifications, but the most generic and accepted is the one that divides them into economic and non-economic incentives:

1. Economic incentives

These are incentives that entail an economic or monetary reward. Examples of them are salary increases, extra payments, commissions, bonuses… That is, everything that implies a salary increase or extra money. These are the most classically used incentives.

They can have a significant impact on the worker, as well as on their productivity, especially if their economy is not particularly good. However, as we have seen, not all incentives work equally for all workers.

2. Non-financial incentives

Non-financial incentives include all those measures that improve the working conditions of the worker.

These types of incentives are much more varied than the previous ones, and include a wide variety of examples (tangible and intangible), such as: restaurant tickets, contributions to pension plans, life insurance, flexible hours, medical insurance, assistance to transport, canteen or childcare services for children, aid to continue studying (training), fruit days at the office, etc

Non-financial incentives are increasingly used by companies, and offer an extra attraction to the working conditions of the position.

Application and functions at work

We have seen how work incentives can be of different types, and how they are not equally effective in all people; thus, they have to be adapted to the needs and preferences of each worker to be effective.

But what exactly is achieved through the administration of effective work incentives? It is much more than a simple improvement in worker productivity. Let's see its most notable functions:

1. boost productivity

The main purpose of incentives, as we have been remarking, is to boost productivity, through increased worker motivation.

2. talent attraction

However, the purpose of incentives goes much further, and they can also be very useful to attract good profiles to the company. In addition to attracting them, they will also serve to retain them., and that the template is competent.

3. Favor the system of promotions

The incentives, by attracting good profiles, also enhance the company's promotion system, since the Workers with the greatest potential will be promoted through said promotions, without going to work at the competence.

4. Filter out workers who don't fit

On the other hand, incentives They also allow discerning and filtering which workers fit better with the company and which ones do not., since workers who feel in tune with the dynamics and philosophy of the company (this includes its incentives), are more likely to continue working in it.

5. Improve the work environment

If workers are comfortable in the company (this is partly due to the administration of incentives), it is more likely that the work environment will be more relaxed, more pleasant and closer.

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6. Reduce absenteeism

It has been shown that being motivated at work reduces absenteeism, sick leave, etc., and said motivation may be partly due to the type of incentives that the company provides to its workers.

7. Reduce costs and accidents at work

Finally, studies have also shown how incentives can influence the reduction of costs and accidents at work in the company, in addition to errors in the workers.