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There is a very famous quote that has been running around for ages “Money cannot buy happiness”. This quote has now been twisted and molded according to the new era, which goes something like “If you think money cannot buy happiness then you are looking at the wrong place.” Today, motivation for the people to do any work comes from the reward latched to it. Employers in the organization follow the same footsteps. They are drawing out innovative ways to motivate their employees to focus more their work goals and increase their productivity. One such way towards this goal is motivating the employees to do more work and contribute in the productivity of the organization are rewarding the employees financially. There have been various studies that are conducted in a meaningful fashion to measure and observe that the employees are participative enough and the improvement in their task has been observed. To understand the conceptual framework of the effect of monetary or financial rewards or incentives on the level of performance of the employee these studies are conducted on regular basis to observe the patterns. At different level and at different times, company faces a lot of challenges to motivate the employees. So they adopt various methods for the same. Basically there are two categories of rewards or incentives that the companies adopt:
The difference between both the methods is easy to distinguish but the level till which they impact the performance of an individual is somewhat difficult to measure.
It is said Money is the best motivator. Financial incentive basically has the involvement of money or monetary benefits in its foundation. Any kind of incentive which has monetary aspect attached to it is categories as financial reward or financial incentives. Some of the famous and most widely adopted types of financial rewards.
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