Explain different financial and non-financial incentives used to motivate employees of a company.

Finanical incentives:
(i) Pay and Allowances: Pay and allowances are the chief monetary incentives for every employee. Salary includes basic pay and dearness allowance alongwith other allowances. The employees remain motivated with the annual increment in pay and allowances.

(ii) Productivity Linked Wage Incentive: The employees can be motivated by linking productivity with their salary. In other words, the increment in salary will be in direct proportion of increase in productivity.

(iii) Bonus: Bonus refers to that payment to employees in addition to their regular remuneration which is paid as a reward of their good services. The bonus plan helps in establishing cordial relations between owners and employees. These days, the payment of bonus to employees is prevalent in almost all industries. The payment of bonus may be in cash or kind. For example, an employee can be given cash reward or sent abroad in recognition of his/her services.
Non-Financial incentives:

(i) Status: Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g., a separate cabin, costly furniture, car, peon, P.A. etc.). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem-related needs.

(ii) Career Advancement Opportunity: Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. Training and development facilities have got to be provided for the promotion of the employees. Therefore, the managers can clear their way to promotion by providing these facilities. When the avenues for promotion are available, the employees certainly get motivated.

(iii) Employee Recognition Programmes: Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in a manner that should give a feeling to every employee that his work is special and that he alone is capable of doing it. By getting such an importance, they are motivated and work harder and in a more responsible manner.