Incentive Compensation and Motivation

Job performance f (ability (motivation

According to the Hierarchy of Needs theory by Abraham Maslow , he suggested a guideline which consists of seven strategies encouraging the creation of employee motivation

Positive reinforcement (high expectations

Effective discipline and punishment

Treating people fairly

Satisfying employees needs

Setting work related goals

Restructuring Jobs

Base rewards on job performance ( Employee Motivation , 2005

Figure 1 Relationship of Remuneratiion , Benefits , and Career

Source : Gilber , Ken (2006

IV .2 Incentive Strategy

Most human resource managers all over the globe believes that incentive

strategy is one of the most direct and practical ways to increase working motivation . Not all however , share the same perspective . There are still unpopular debates regarding how incentives really affecting employees ' motivation . Some considered that bonuses and other forms of incentives will only lead to a working condition where all the employees are only paying attention to their bonuses instead of doing the best things for their companies

This argument is rebutted with the sentiment that as long as companies have the ability to properly arrange the compensation system , workers will perform as expected . In reality however , many firms believe that a simple compensation system would be sufficient to increase employees motivation , which lead them to a surprising ending where employees took advantage of the system for their own gain instead of thinking of the firm 's well being . This lack of capacity to generate a proper incentive system leads these firms to assume that incentives are perhaps tools to create employee motivation , buy not employee loyalty (Bebchuk , 2003

Therefore , some decided that it is better to simply improve the working environment , get the people to enjoy their work more and get to the better nature of their employees rather than spending money on expensive incentive system that would finally take all the work...