JINGCO, SOFIYA - HRDM 2-1 - Monetary or Financial Incentives

WEEK 4 - INCENTIVES - Non-monetary or Non-financial Incentives

FEB. 26, 2024
NON-FINANCIAL INCENTIVES
EMPLOYEES INCENTIVE PROGRAMS IN 2020 • Career Development
- Today's employee incentive programs have to consider • Management Development
the wants and need of the modern worker items such as
paid transport. MONETARY OF PRINCIPAL INCENTIVES
- Money is the determinant factor of an incentives.
- However with employee becoming increasingly aware of - Impacts self-confidence and give sense of security to the
the number of options available to them in terms in workers. They take more interest in work and produce more in
terms of job opportunities, companies are having to the _______
compete harder than ever to attract the best talent
available PROVISIONARY - wants to be regular employee
- To standout employers and manager need to modernize A. Allowances
their approach to employees’ incentive, and think B. Profit Sharing - Portion/Share lang binibigay ng
outside the box when creating employee incentive employer/company
program
Example: Lactation Room PROFIT SHARING DISTRIBUTION FORMULA:
Profits - profit sharing percentages (employee compensation /
DO EMPLOYEES INCENTIVE PROGRAM WORK? Total number of employer compensation
According to statistics:
• 90% of the highest performing companies use incentives and Example:
rewards to retain and encourage employees • Three employees.
• 99% of employees have unique______ A = Php 200,000.00 per year
• 80% of employees prefer strong incentives over a bigger B = Php 300,000.00 per year
payback. C = Php 500,000.00 per year
• 78% of employees are willing to remain with their current
company due to the..... • Total compensation - Php 1,000.00
• Total profit of a business - Php 500,000.00
In addition to this stats • Total percentage per profit share = 10%
- It should be right person in the right position
- Most of the employee resign due to lack of incentives A = (500,000 x 10%) (200,000 / 1,000,000) - (50,000) (.20) = Php
- Incentives are effectively motivates when the objective to be 10,000
met are clearly started upfront and when the incentives offered.
B=?
INCENTIVE DEFINITION C=?
- Is something like a prize or desired action that gets an
employee to do more or whatever is/was encouraged by the C.
employer. (500,000 x 10%) (500,000/1,000,000)
- An example of this is company throwing _________ (50,000) (0.5) = Php 25,000

TYPES OF COMMISSION
INCENTIVE SCHEME  Straight Commission
- Regardless kung money or not, anything na na-aattract sayo to  Salary and Commission
stay in the company.  Graduated Commission
- Need to increase productivity 1. On the basis of industry:
- Way to motivate people 2. On the basis of locality
- Perceive value to the company 3. On Industry cum locality basis:
4. on unit basis
Expected Value mo + low value na binibigay ng company sayo = 5. On Dept. Basis 6. On individual Basis:
no retention (meaning incentive is needed)

MERITS OF PROFIT SHARING

INCENTIVE LAW: 1. Industrial ___________
- Increase productivity 2. Increase in Production
- Thank employees for doing their work well 3. Economy
- Build trust with employers 4. Stability in Job
- encourage teamwork 5. Reduction on supervision
- reward high achieving employees 6. Industrial Democracy
TYPES OF INCENTIVES 7. Increase in income and efficiency of worker

C. BONUS
COMMISION
- Refers to the compensation paid to an employee after
completing a task, which is often selling a certain
number of products.
STRAIGHT COMMISSION
- No salary
EXAMPLE:
Juan Dela Cruz receives 25% commission on yhe appliances he
sells. If he sells an Iphone 15promax 256GB for Php. 90,000. An
Iphone 128GB for Php. 45,000. How much does Juan Dela Cruz in
commission?
ANSWER: 33,750 (2 units sold - commission of 33,750)
- No salaries - chances no income.
SALARY PLUS COMMISION
EXAMPLE:
Employee X works for a company whixh pay him for a total net of
14,543.00 per month and 5% of any sales above 50,000. If he sold
goods worth 100,000. He will receive a total income of ____
ANSWER: 2,500
C = 100,000 - 50,000 = 50,000 x 5%
GRADUATED COMMISION
Employee Y works a sales Inc. for a company that pay him 1% on
the first 5,000 sold, 2% on next 15,000 sold and 3% on all sales
over 20,000.
5,000 x 1% = 50,000
25,000 - 5,000 = 20,000
15,000 x 2% = 300
20,000 - 15,000 = 5,000
5,000 x 3% = 150 pesos
50 pesos + 200 + 150 = 500 pesos
NON-MONETARY / NON-FINANCIAL INCENTIVE
- Include all Non-financial, social and psychological factors
for which employees get incentive for maximum and
outstanding work.
- Non- monetary incentive play an important role in
getting work with greater efficiency from the worker
- For the workers monetary reward has a great
significance but of still greater importance is their
interest in satisfying social and psychological needs.
1. Job Security - Every employee wants his job to be stable and
secure, securing, security of service inspire him to perform his
duty efficiently.
2. Opportunity in progress - Employee looks for an opportunity
to make progress. It is therefore essential that everybody should
be ___ opportunity for advancement.
- It is possible that he may not be able to take hope for
the opportunity. Everyone prefers on higher post to
financial gain.
- Apply another company with different position.
3. Sound Policy - expects justice and fair treatment on the
company. In matters of promotion or transfer, etc. The
management must play fair workers, lose confidence in
management when latter exercises discrimination. Besides their
enthusiasm by work becomes work.
4. Workers participation in management:
- Workers should have the right to participate in
management of industry on to conduct the business and
to give advice in matters of mutual interest.
5. Praise
- Everybody likes that his good works be appreciated. It is
the weakness of an ordinary person that feels greatle
flattered at his praise. It satisfies his ego.
- Praise has great more motivational force. It constantly
inspires the worker
6. Knowledge of results
- Must be made aware of the results of the work being
done by them so as motivate them to produce still.
You must be knows as worthy employee
7. Recognition
TYPES OF INCENTIVES: NON-FINANCIAL
1. Recognition Incentives
2. Reward Incentives 3. Aprreciation Incentives
TYPES OF INCENTIVE PLAN
1. Individual Incentive plan
2. Piece work
3. Standard hour plan – base on the rendered hours
4. Bonus
5. Merit Pay Incentive- awards and recognition special
contributions, achievements or service to the
organization are often recognized through merchandise
awards, personalized gifts, vacation, and gifts vouchers.
Etc. Presenting tangible awards.
SALES INCENTIVES
1. Straight Salary Plan
2. Group Incentive Plan - Ex. Call center, production dept.
- These incentive plan have become popular when many ______
3. Combined salary and commission Plan
TYPE OF GROUP INCENTIVE
Team compensation plan – these plan rewards team members
with Incentive bonus when the performance standards are met
or exceeds
- Gain Sharing Plan – organization plans to increase
productivity gain of sharing plan.
STEPS IN GROUP INCENTIVE PLAN
1. Setting performance measures
2. Determining of the size of the incentives
3. Establishing payment formula
THREE (3) TYPES OF GAIN SHARING PLAN
1. Scanlon Plan:
- It was developed by official of united steel workers.
5 FEATURES OF SCANLON PLAN
 1. Philosophy of cooperation
2. Identity
3. Competence
4. Improvement system – solacing suggestions
5. Sharing benefits

2. Rucker Plan - Financial incentive based on the historic

relationship between
3. IMPROSHARE - bonuses are based on the overall productivity
of team.

3. Organizational Level Incentive Plan

- include all the employees irrespective of teams/ groups
- These incentives are based on the success of the organizations
as a whole over a period of time.

4. Incentive to professional employees: ex. Scientist, consultants

- Cannot advance beyond certain point of salary structure in
some organization unless they are willing to become
administrators their talents cannot be utilized. Under these
circumstances they can be motivated through bonuses and merit
increases.
- Executive pay packages for professional basically consists of
basic salary, short-term incentive / bonuses, long-term
incentive /stock plans, benefits, prerequisites or perks and
golden parachutes (guaranteed position).

The Best 23 employees’ incentive programs for the modern

enterprises
1. Customized paid Vacation
2. Green transport service
3. On-site entertainment – Ex. Videoke, Billiards
4. Unlimited Sick Leave
5. Free Online skill Development Course - Ex. Webinar
6. Free Elearning program
7. One on One mentorship
8. Fast food catering on specific weekdays
9. Free healthy snacks
10. Stationery and Equipment personalization
11. Health and wellness program
12. Club and Society membership
13. Rest and relaxation rooms
14. Streaming service Subscriptions
15. Department / Team Activities ex. Team buildings
16. Gamification of tasks
17. Profits among employees
18. Working remotely, whenever Ex. Work from home
19. Elimination of Degree Requirements
20. Unlimited Medical Insurance Coverage
21. Vehicle financial Assistance
22. Consumer goods financing
23. Student loan debt assistance
Event management – TESDA – for working abroad