COMPENSATION AND

BENEFITS,
MOTIVATION
Session 7
Compensation and Benefits
 Attract employees
 Retain employees
 Motivate employees
 Compliance with pay laws
 Administrative simplicity
 Cost effectiveness
Monetary Incentives
Money is the main element of incentives. It boosts
the enthusiasm and self-confidence of the workers.
It provides the workers with economic security and
social security.
 Types of Monetary Incentives

 Profit-Sharing
 Co-Partnership
 Bonus
 Suggestions and Advices
 Commission
 Prizes
Non-Monetary Incentives

Incentives not based on money are non-monetary

incentives. Non-monetary incentives are useful in
increasing production and efficiency.
Types of Non-Monetary Incentives
 Security of employment
 Free Food
 Promotion
 Adviser
 Assignment of responsibility
 Welfare activities and amenities
 Other incentives such as housing facilities, life
insurance, educational and conveyance allowances
etc
Motivation

Motivation refers to forces within an individual

that account for the level, direction, and
persistence of effort expended at work.
 Types of Motivation Theories
Content theories
Focus on individual needs – that is, physiological or
psychological deficiencies that we feel a compulsion to reduce
or eliminate.
Process theories
Focus on the thoughts, or cognitive processes, that take place
within the minds of people and that influence their behavior.
 Content Theories
 Maslow’s Hierarchy of Needs Theory
 Identifies five levels of individual needs.
 Assumes that some needs are more important than
others and must be satisfied before the other needs can
serve as motivators.
Maslow’s Hierarchy of Needs
Pyramid
Content Theories
Content Theories

ERG Theory
 Existence needs
 Desire for physiological and material well-being.
 Relatedness needs
 Desire for satisfying interpersonal relationships.
 Growth needs
 Desire for continued personal growth and development.
Content Theories
Alderfer’s ERG Theory
of Motivation
 Content Theories
Acquired needs theory
 Need for achievement
 The desire to do something better or more efficiently, to
solve problems, or to master complex tasks.
 Need for affiliation
 The desire to establish and maintain friendly and warm
relations with others.
 Need for power
 The desire to control others, to influence their behavior, or to
be responsible for others.