¶ … businesses in today's society are beginning to see by rewarding employees for their work is actually an asset not an expense.
Research is now showing incentive plans, when implemented correctly, "serve as a cost effective compensation vehicle that focus employees on key business objectives while creating meaningful links between results and rewards" (Incentive Reward
Organizational Life Cycle From Competitive Advantage Viewpoint).
In rewarding employees, they feel they have reached an achievement, they feel they are an asset to the company, and have a greater sense of belonging. Also the rewards work well as a motivational tool. The incentive motivates the employee to perform which in turn enhances the performance of the company.
The traditional employee incentives that were based on the position or on seniority are no longer in effect. Rewards are now based on quality of performance and quantity of work. The types of rewards used by a company plays a very important role in motivating the employee. There are three types of incentives groups: Human Capital
which rewards employees in developing their own capital and using it; Output Reward
which is used to arouse more potential from the employee and lastly the Position Reward which encourages the employee to assume more responsibility in the workforce.
Companies now have many options as to how the reward could be dispersed. Incentives could be stocks, bonuses, salary increases, etc. The reward may be given to the employee for higher sales or great customer service.
Companies must use common sense and have a well organized human resources department. Understanding what employees expect of an employer is a key advantage.
Human Resources must have a strategy and be able to execute that strategy in order for the rewards to work to the companies' advantage.
There is no way a company's incentive program could fail. It is a program that is very workable. If one incentive does not intrigue the employee another could easily replace it. Employees themselves could give input on what they feel would be a reasonable reward. Everyone benefits from this type of program in the workforce.
Resource:
Incentive Reward Organizational Life Cycle From Competitive Advantage Viewpoint
2005
Pages 158-162
