Page 2 - Microsoft Word - Home assignment 19 Directing Meaning Importance

(i) Pay and allowances: For every employee, salary is the basic

monetary incentive. It includes basic pay, dearness allowance

and other allowances. Salary system consists of regular

increments in the pay every year and enhancement of

allowances from time-to-time. In some business organizations,

pay hike and increments may be linked to performance.

(ii) Productivity linked wage incentives: Several wage incentive

plans aims at linking payment of wages to increase in

productivity at individual or group level.

(iii) Bonus: Bonus is an incentive offered over and above the

wages/ salary to the employees.

(iv) Profit Sharing: Profit sharing is meant to provide a share to

employees in the profits of the organization. This serves to

motivate the employees to improve their performance and

contribute to increase in profits.

(v) Co partnership/ Stock option: Under these incentive schemes,

employees are offered company shares at a set price which is

lower than market price. Sometimes, management may allot

shares in line of various incentives payable in cash. The

allotment of shares creates a feeling of ownership to the

employees and makes them to contribute for the growth of the

organization.