Page 2 - Lesson Note 4

(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.

Example: In Infosys the scheme of stock option has been implemented

as a part of managerial compensation.

(vi) Retirement Benefits: Several retirement benefits such as provident

fund, pension, and gratuity provide financial security to employees after

their retirement. This acts as an incentive when they are in service in the

organization.