Financial and Non Financial Incentives :

Incentive means all measures which are used to motivate people to improve performance.

These incentives may be –

Financial Incentives :

Financial incentives refer to people for better performance.

Financial incentives are: 

(a) Pay and allowances :

It includes basic pay, dearness allowances and other allowances.

(b) Commission:

Urttfer this system, a sales person is guaranteed a minimum wage as well as commission on sales. A commission plan motivates him to work better.

Non Financial Incentives:

Incentives which are not measurable in terms of money are called Non Financial Incentives. These incentives are essential for satisfying psychological, social and emotional needs.

Some of the important non financial incentives are:

(a) Status:

status means ranking of positions in the organisation. Psychological, social and esteem needs of an individual are satisfied by status given to their job.

(b) Organisational Climate :

It includes individuals autonomy, reward orientation, consideration to employees, etc. These characteristics influence the behaviour of individuals in the organization