The importance of Incentive Programs
They can range from the mundane - a special parking spot - to the spectacular -a trip to Tahiti. Sometimes they have catchy or clever names such as employee of the
month award, going the extra mile or extra effort awards � or they may simply consist of an extra little something in your paycheck. Virtually every company, large or small, has them.
Productivity bonuses have been around for a long time � the concept dates back to the days when manual laborers who were paid by the hour would earn extra money for producing extra within that
time. Today, around 36% of hourly paid workers regularly receive a financial bonus or incentive, while around 20% of company executives receive productivity incentives.
The traditional profit sharing bonus is still one of the most common incentives, � if the company makes money, all of the employees and shareholders benefit. Many companies still give employees
a traditional Christmas bonus or present the profit sharing checks along with a celebration.
In addition to cash incentives, companies routinely offer other incentives such as additional vacation time, merchandise or travel rewards. Sales jobs in particular often base salary increases
on long term performance.
And there is also plenty of evidence to suggest that incentives and bonuses not only ensure more profitable employees - but a more relaxed and happier workplace as well. Employee Incentive
Programs can fully manage a company's incentive operations while saving the organizations' managers an extensive amount of time.
The International Society of Performance Improvement points out that an effective incentive program can increase performance by up to 25% in an employee. As far as companies are concerned,
bonuses and incentives are given to employees for several different reasons � to reward good work, to create an incentive to reduce costs and to encourage employees to think from a
shareholder�s viewpoint. Many employees see things differently � a bonus is their fair and expected reward for working hard and bringing in money.
It�s perhaps a matter of opinion as to what the least exciting employee incentive might be � the special parking spot may be top of that list. And the most spectacular incentives? First place
has to go to the huge annual bonuses of up to six figures that are still routinely handed out to employees of investment companies and merchant banks.
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