Page 3 - Lesson Note 4

(vii) Perquisites: In many companies perquisites and fringe benefits are

offered such as car allowance, housing, medical aid, and education to

the children etc., over and above the salary. These measures help to

provide motivation to the employees/ managers.

All the needs of individuals are not satisfied by money alone. Psychological,

social and emotional factors also play important role in providing motivation.

Non financial incentives mainly focus on these needs.

Sometimes, monetary aspect may be involved in non-financial incentives as

well. However, the emphasis is to provide psychological and emotional

satisfaction rather than money driven satisfaction.

For example, if an individual gets promotion in the organization, it satisfies

him psychologically more as he gets a feeling of elevation, increase in status,

increase in authority, challenge in the job etc., though promotion involves

payment of extra money, non-monetary aspects over-ride monetary aspects.

Some of the important non-financial incentives are discussed below:

(i) Status: In the organizational context, status means ranking of positions

in the organization. The authority, responsibility, rewards, recognition,

perquisites and prestige of job indicate the status given to a person

holding a managerial position. Psychological, social and esteem needs of

an individual are satisfied by status given to their job.

(ii) Organizational Climate: Organizational climate indicates the

characteristics which describe an organization and distinguish one

organization from the other. These characteristics influence the