Incentives

CONTENTS Research Methodology Title Selection of Topic Need and Importance of the Study Objective of the Study Hypothesis
thesis of the Study Data Collection Limitations Company Profile Introduction of the Topic
Data Representation, Analysis & Interpretation
Conclusion Suggestions Bibliography
To study the effects of monetary and other incentives
RESEARCH METHODOLOGY
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N.M.D. COLLEGE, GONDIA
RESEARCH METHODOLOGY
TITLE OF MY STUDY To study the effects of monetary and other incentives on the employees of Hari Om Ginning & Pressing, Sillod (Dist.: Aurangabad). SELECTION OF THE TOPIC At the outset, as a student of the IIIrd year of Bachelors in Business Administration at N.M.D. College, the study topic had to be chosen and researched thoroughly for presentation. The ultimate success of any organization depends upon the various policies adopted by the management in respect of its employees. One of the major policies that need to be devised to get the best out of the existing and new employees is the policy of incentives. Since the topic deals with the individual employees at Hari Om Ginning & Pressing, Sillod (Dist.: Aurangabad) about the effects of monetary and other incentives on their performances, it has therefore been titled: To study the effects of monetary and other
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incentives on the employees of Hari Om Ginning & Pressing, Sillod (Dist.: Aurangabad). NEED & IMPORTANCE OF STUDY They can range from the mundane - a special parking spot - to the spectacular -a trip to some foreign land. Sometimes they have catchy or clever names such as employee of the month award, going the extra mile or extra effort awards or they may simply consist of an extra little something in your paycheck. Virtually every company, large or small, has them. Productivity bonuses have been around for a long time the concept dates back to the days when manual laborers who were paid by the hour would earn extra money for producing extra within that time. Today, around 36% of hourly paid workers regularly receive a financial bonus or incentive, while around 20% of company executives receive productivity incentives. The traditional profit sharing bonus is still one of the most common incentives, if the company makes money, all of the employees and shareholders benefit. Many companies still give employees a traditional Christmas bonus or present the profit sharing checks along with a celebration.
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In addition to cash incentives, companies routinely offer other incentives such as additional vacation time, merchandise or travel rewards. Sales jobs in particular often base salary increases on long term performance. And there is also plenty of evidence to suggest that incentives and bonuses not only ensure more profitable employees - but a more relaxed and happier workplace as well. Employee Incentive Programs can fully manage a company's incentive operations while saving the organizations' managers an extensive amount of time. The International Society of Performance Improvement points out that an effective incentive program can increase performance by up to 25% in an employee. As far as companies are concerned, bonuses and incentives are given to employees for several different reasons to reward good work, to create an incentive to reduce costs and to encourage employees to think from a shareholders viewpoint. Many employees see things differently a bonus is their fair and expected reward for working hard and bringing in money. Its perhaps a matter of opinion as to what the least exciting employee incentive might be the special parking spot may be top of that list. And the most spectacular incentives? First place has to go to the huge annual bonuses that are still routinely
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handed out to employees of investment companies and merchant banks. OBJECTIVES OF STUDY 1. To study the current incentive plan incorporated by the company. 2. To study the current wage structure used by the company. 3. To study the financial expectations of an employee for a given job. 4. To determine the level of understanding of the company's incentive plans by the employees. 5. To study employees response to the current incentive plans. 6. To study the level of employee satisfaction by the current incentive plan. 7. To study the importance of incentive plans in Hari Om Ginning & Pressing, Sillod (Dist.: Aurangabad). 8. To provide suggestions based on research findings to improve current incentive plans and increase employee satisfaction. HYPOTHESES H-0: Incentives are necessary for the growth and success of an organisation.
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H-1: Incentives are extremely important for the motivation of employees. H-2: Performance of an employee can be boosted by a good incentive plan. H-3: Incentives help induce a sense of belonging and loyalty to the company. DATA COLLECTION The Questionnaire was used to collect the basic data from the employees. The rest of the study was done through my conceptual abilities, with the help of books, internet and my guide. LIMITATIONS OF THE STUDY 1. The conduction of this study was a time consuming process. 2. The employees are hesitant in participating in the research study. 3. The illiteracy of the employees posed a hindrance in conducting the study. 4. It is difficult to study the behavior and responses of an employee.
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COMPANY PROFILE
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COMPANY PROFILE
HARI OM GINNING AURANGABAD) & PRESSING, SILLOD (Dist.:
Hari Om Ginning & Pressing is based in the town of Sillod, which is located approximately 60 kms. from the city of Aurangabad. It was formed 8 years ago, and now produces upto 10000 cotton bales annually. BUSINESS PROCESS The business acquires raw cotton from the farmers in Aurangabad district as well as other places in Marathwada region of Maharashtra. The raw cotton is then worked upon in the Ginning unit, where the seeds are removed and cleaned cotton is passed on to the Pressing unit. This process is partly automated and requires some labour to keep the process in constant check. At the Pressing unit, the cleaned cotton is moisturized and pressed into cotton bales. This process too is partly automated, and labour is required to keep the machine in working order through the entire process. The cotton bales are then sold to the companies in the textile industry as well as exported for different purposes.
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PROPRIETOR AND LABOUR REQUIREMENTS This type of industry requires both skilled and unskilled labour. Skilled labour is required since the technique of recognizing good quality cotton in respect of strength and mic is a special job that cannot be entrusted to a layman. This part of the job is performed by different staff at different times. Supervisors are required for maintenance of the machineries. The other kinds of staff employed relates to the field of Human Resources, Security, Administrative and Finance. Hari Om Ginning & Pressing employs a total staff of 64, which includes an unskilled labour staff of 32. The proprietors name is Mr. Naveen Agrawal, and he has taken charge of the plant owned by the entity since 2009. His thoughtful leadership and visionary policies have helped Hari Om Ginning & Pressing gain a tremendous amount of market share in the industry, and also improved the efficiency of their day-to-day activities. The labour turnover is particularly low, and Mr. Naveen Agrawal prides himself in the fact that he is a very good man manager. ORGANISATION STRUCTURE The organizational hierarchy of Hari Om Ginning & Pressing has been depicted in the flowchart below:
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INCENTIVES PROVIDED The personnel at the Managerial Level are provided the following incentives by the proprietor: The company car is made available for their use in businessrelated activities. They are provided Health Allowance, along with their salaries. They are provided with Educational Aid for upto two childrens higher secondary education. They are provided with the facility of Personal Loans and Advances at nominal rates, if required. They are provided an all-expense paid family vacation in India for upto 7 days during the off-season.
The Graders are provided the following incentives as a part of their salaries for their services provided: The plant is upgraded with the latest technological developments so that the graders work is made easier. If they manage to close a deal of high-quality cotton for a price lower than standard price, they are paid a certain percentage of such a gain as a monetary reward. They are paid half their salaries during the off-season.
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They are provided with Educational Aid for upto two childrens senior secondary education.
The Supervisors, Fitters, Oilmen, Helpers and the other Miscellaneous Staff at the plant of Hari Om Ginning & Pressing are provided with the following incentives: They are paid higher wages than what is paid normally in the industry. They are provided with specialized safety training. They are paid an additional bonus based on any excess production of cotton bales than the standard number specified in a given number of working hours per week. An insurance policy cover has been taken on the lives of all the supervisors, fitters, oilmen, helpers and miscellaneous staff. They are provided with the facility of a Doctor on Call during all working hours at the plant. They are provided one free meal per week, usually on every Saturday. They are allowed periodic breaks during the working hours. Fire Extinguishers are installed at prominent locations on the site to ensure their safety. They are paid a Loyalty Bonus on the festival of Diwali.
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The labourers at the plant of Hari Om Ginning & Pressing are provided with the following incentives at work: They are paid higher wages than what is paid normally in the industry. They are provided with specialized safety training. They are provided one free meal per week, usually on every Saturday. They are provided with accommodation on the campus, if required. The plant is regularly inspected for hygiene and cleanliness to ensure safe working conditions. They are allowed periodic breaks during the working hours. Fire Extinguishers are installed at prominent locations on the site to ensure their safety. They are paid a Loyalty Bonus on the festival of Diwali. They are paid a bonus where the wastage produced by their batch per week is lesser than the standard waste expected per unit of production.
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INTRODUCTION OF THE TOPIC
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INTRODUCTION OF THE TOPIC

MEANING OF INCENTIVES What is Incentive? In simple words, incentive is anything that attracts a worker and stimulates him to work. The incentives can be financial and non-financial. Both types of incentives play important role under different conditions. For example, financial incentives are considered to be more valued under the work conditions where wages are at low levels. On the contrary, nonfinancial incentives are more preferable where wage levels are high and the rate of tax is progressive. However, a review of research evidences indicates that there is a shift in emphasis in the demands of employees and their unions from financial to nonfinancial benefits. The term incentive has been defined differently by different authors. We produce here a few of these definitions: According to the National Commission on Labour: Wage incentives are extra financial motivation. They are designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present or targeted results."
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Burak and Smith: "An incentive scheme is a plan or program to motivate individuals for good performance. An incentive is most frequently built on monetary rewards (incentive pay or a monetary bonus), but also may include a variety of non-monetary rewards or prizes." According to Venkata Ratnam and Srivastava: "A wage incentive scheme is a method of payment for work of an acceptable quality produced over and above a specified quantity or standard." Now we can define incentive as a system of payment under which the amount payable to his output. Such a payment is also called 'payment by results' (PBR). Thus, PBR refers to a method which provides for the "direct linking of workers earnings to a measure of their performance. MEANING OF INCENTIVES 1. Incentives are based on a standard of performance for the job. 2. Incentives are measurable in monetary terms. 3. Incentives are meant to motivate workers for better and more performance.
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4. Incentives have direct linking to performance. 5. Incentives vary from person to person and from time to time for the same person. OBJECTIVES OF INCENTIVES 1. 2. 3. 4. Profitable for both workers and management Help to increase the production Reduce cost High up morale by rewarding workers in proportion to their output 5. Recognize the worker for his good performance 6. Improve utilization of equipment, materials and service 7. Should furnish a basis for cost control and labour control 8. Reduce labour turnover and absenteeism 9. Aim at improve relations between workers and management LIMITATIONS 1. There is a possibility of reducing the quality of products since incentives are usually based on output. 2. Workers paid by results disregard security regulations in order to achieve output. It will increase the danger of accidents. 3. Some workers may work day and night, it would affect their health.
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4. Jealousy and conflict may arise among employees, because some employees will earn more. 5. Workers may oppose introduction of new machines, methods as they fear that new methods or machines will decrease their earnings, 6. When production is disrupted due to management fault, the workers will insist to get compensation. ASSUMPTIONS An incentive scheme is usually based on three assumptions: 1. The belief that money is a strong motivator. 2. That the relationship between effort and reward can be systematically established. The relationship so based leaves no doubts in the minds of the concerned employees. 3. The feedback to the employees is immediate and direct. CLASSIFICATION OF INCENTIVES Incentives are classified as under: FINANCIAL & NON-FINANCIAL Incentives INDIVIDUAL & GROUP Incentives FINANCIAL INCENTIVES Financial incentives include Salary, premium, reward, dividend, bonus, income from investment. Financial incentives play a very
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important role in improving the performance of the employees. Cash plays a very important role in fulfilling the needs of the individuals especially of labor class. NON-FINANCIAL INCENTIVES As the employees have other needs like respect and self centered needs, they can be motivated with the help of following nonfinancial incentives: Job Satisfaction Job Security Respect & Recognition Training and other employee improvement programs Housing / Medical / Educational Facilities Opportunities for growth Suggestions schemes, praises, employees-superiors relationship, etc.
INDIVIDUAL INCENTIVES Individual incentives are the extra compensation paid to an individual for all production over a specified quantity. It has certain advantages like:
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1. Administration of individual incentives is simple because incentives can be given after the assessment of individuals work. 2. Each and everybody gets the return in accordance with work. This makes the person more dedicated towards the work. 3. Persons who do the work with less efficiency are not entitled to incentives. Yet, there are some limitations of the system of Individual Incentives:
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2. 3.
4. 5.
The employees inclination is more on quantity as compared to quality. Rigidity of rates. This incentive system is inappropriate where delays are frequent and beyond the individuals control as well as where the work is automated. Adverse effect on speeding production upon the health of the employee. There is a problem of restriction of output in view of group pressures from the fellow employees.
GROUP INCENTIVES
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Group incentives system involve co-operation among employees , management and the union for reduction in labor, material and supply costs, strengthening of employee loyalty to the company. The advantages of a Group Incentive scheme are: 1. Reduces absenteeism and production 2. Reduces conflict and confusion among group members 3. Group incentives lead to lesser control. REQUIREMENTS OF A GOOD INCENTIVE 1. Proper climate: This means that the relation between management and employees should be good and free from suspicion. 2. Co-operation of workers 3. Workers participation: Wage incentive scheme should be implemented with the consultation of workers and union. 4. Scientific standard: The scheme must be based on scientific management. 5. Simplicity: The incentive scheme should be simple and everybody must understand it.
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6. Equitable: This opportunity to all.
means
the
scheme
should
give
equal
7. Flexible: Changes may be required due to technological changes, market demand etc 8. Less costly 9. Wide coverage. 10. Guarantee minimum wages: It will ensure a security to all. 11. Ceiling on earning: The maximum amount of earnings must be fixed. It will help to maintain quality. 12. Grievance settlement on time. 13. Timely payment of incentive. 14. Follow up: Required to rectify the mistakes in incentive scheme.
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WAGE INCENTIVE We may define wage incentive as a system of payment under which the amount payable to a person is linked with his output. Such payment may be called payment with result. It refers to all plans that provide extra pay for extra performance in addition to regular wages for a job by Hummel & Nickerson. TYPES OF WAGE INCENTIVE SCHEMES The following different wage incentive plans for direct workers will be discussed: 1. Straight piece rate 2. Halsey Premium plan 3. Rowan Premium plan 4. Bedaux Point Plan 5. Gantt Task & bonus plan 6. Emerson efficiency plan 7. Taylors differential plan INDIVIDUAL INCENTIVE (STRAIGHT PIECE RATE) SCHEME
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Under this plan, employees are paid on the basis of results. The chief incentive plans included in this category are discussed in seriatim. HALSEY PREMIUM PLAN This plan, originated by F.A. Halsey, an American engineer, is a combination of the time and the piece wage in a modified form. Under this plan, a guaranteed wage based on past experience is determined. If a worker saves time, he gets 50% of wages for time saved (called premium) in addition to normal wages. It is optional for the worker to work on the premium or not. Thus, this plan also provides incentive to efficient workers. Advantages: It is simple to understand and guarantees time wages to employees. The wages of time saved are shared by both employers and workers, so it is helpful in reducing labour costs. It makes a distinction between efficient and inefficient workers, and gives increasing incentives to efficient workers. Disadvantages: Quality of the work suffers because workers are in a hurry to save more and more time to get more and more incentive.
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Workers criticize this method on the ground that the employer gets a share of wages of time saved. Illustration: Rate per hour = Rs. 15 / hour Time allowed for job = 20 hours Time taken = 15 hours Calculate the total earnings of the worker under the Halsey plan. S (Standard time) = 20 hours T (Actual time taken) = 15 hours R (rate) = Rs 15 per hour Total earnings = [T x R] + [50% (S - T) x R] = [15 x 15] + [50% (20 - 15) x 15] = Rs. 262.50 Thus, the Effective Rate of Earnings = 262.50 / 15 = Rs. 17.50 ROWAN PREMIUM PLAN This plan was developed by D. Rowan in 1901. Under this method, the worker is again guaranteed wages at the ordinary rate for time taken by him to complete the job. The difference
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between Rowan and Halsey Premium plans are in the calculation of bonus. Under Halsey plan, bonus is fixed percentage of the wages of time saved; whereas under Rowan plan, bonus is that proportion of the wages of the time taken which the time saved to the standard time allowed. The bonus is: Where: T = Actual Time Taken, S = Standard Time Allowed, R = Rate per hour. Illustration: Assume that (i) Hourly Wage Rate is Rs. 10, (ii) Actual time taken to complete the job is 4 hours, and (iii) Standard time is 6 hours. Thus, Total Earnings = [10 x 4] + [(6 - 4 / 6) x 10 x 4] = 40 + 13.33 = Rs. 53.33
S-TS*T*R T*R+(S-TS*T*R)
The total earnings will be calculated as:
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BEDAUX PLAN Under this plan, every operation or job is expressed in terms of standard minutes, which are called Bedaux points or Bs; each B representing 1 minute. Through time and motion study, upto 100% performance (i.e. upto standard Bs), the worker is paid time wages without any premium for efficiency. If the actual performance exceeds the standard performance in terms of Bs, then 75% of the wages of the time saved is paid to the worker as bonus and 25% is earned by the foreman. For example, standard time required for a job is 20 hours, i.e. 1200 Bs in terms of minutes (20 x 60), whereas a worker has taken 16 hours, i.e. 960 Bs instead of 1200 Bs. The worker has saved 240 Bs or 4 hours (4 x 60). Suppose the time rate is Rs 20/- per hour, the time saved will be equal to Rs 80 (4 x 20). The worker will get 75% of the amount of Rs. 80/- saved by him. So his total earnings will be as follows: Time wages for 16 hours = Actual time taken @ Rs. 20/- per hour = Rs. 320/Bonus = 75% of 4 hours wages [(75 / 100) x 4 x 20] = Rs. 60/Thus, Total Earnings = Rs. 380/EMERSON EFFICIENCY PLAN
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Under this scheme, both standard work and day wage are fixed. Bonus is paid on the basis of worker's efficiency. A worker becomes entitled to get bonus only when his / her efficiency reaches to 67%. The rate of bonus goes on increasing till he achieves 100% efficiency. Above 100% efficiency, bonus will be 20% of the basic rate plus 1% for each 1% increase in efficiency. In this way, at 120% efficiency, a worker receives a bonus of 40% and at 140% efficiency, worker gets 60% of the day wage as bonus. Salient Features: In this plan, bonus is payable only when efficiency touches 66.7% of standard laid down. The amount of bonus payable increases progressively with increase in efficiency in such a manner that at 100% efficiency, the bonus is 20% of hourly rate. For efficiency beyond 100%, additional 1% bonus is payable for each 1% increase in efficiency beyond 100%. Thus at 110% efficiency bonus payable is 30% and total wages payable are time wages for the actual time taken plus 30% of time wages as bonus.
Illustration:
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Standard output / day of 8 hrs is 16 units. Actual output of a worker for 8 hrs is 20 units. Rate per hour is Rs 2.50. Calculate wages as per Emersons efficiency plan. Level of performance = (Actual / Standard output) x 100 (20 / 16) x 100 = 125% Bonus payable is 45% as follows:At 100% efficiency For next 25% @ 1% for each Total Bonus Time Wages for 8 hours Add 45% bonus Total Wages Payable GANTT TASK AND BONUS PLAN This plan is devised by H.L. Gantt. This plan combines time, piece wage and bonus. The steps involved in following this plan are:

20% of time wages 25% of time wages 45% 8 x Rs. 2.50 = Rs. 20/(45 / 100) x 20 = Rs. 9/Rs. 29/-
First, a standard time is fixed for doing a job. The actual performance is calculated, and efficiency is determined using the standard time as fixed. If a worker takes more time than standard time (i.e. his efficiency is below 100%), he is given wages for the time.
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If a worker takes standard time to perform the task (efficiency is 100%), he is given wages for standard time and a bonus of 20% of the wages earned. If a worker takes less than standard time, he is given wages for the standard time, plus a bonus of 20% of the wages earned for the standard time. In other words if the performance is more than 100%, he is given wage plus 20% of piece wages.
Advantages: 1. Simple to understand 2. Ensures guaranteed time wages to the worker who are below average 3. Worker tries to become more efficient since increasing rate of bonus is very satisfying to efficient workers. 4. Fixed cost per unit decreases with increase in production due to incentive for efficient workers. Disadvantages: 1. It divides the workers into two categories, one who earns the bonus and the other who does not. Illustration: Standard Output per day = 1000 units
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Guaranteed payment = Rs. 500/- (i.e. 50 Paise / unit)

Worker A produces 850 units, so his performance is 85%. He will get Rs. 500/- since they are the guaranteed wages. Worker B produces 1000 units, so he will get Rs. 500 plus 20% bonus pertaining to standard time, i.e. 20% of Rs. 500/= Rs 100. Thus, total wages will amount to Rs. 600/-. Worker C produces 1100 units, so his level of performance is 110% and therefore he will get 20% piece wages as bonus. Piece wages for 1100 units @ 50 paise / unit = Rs. 550/20% Bonus = Rs. 110/Thus, Total Wages Earned = Rs. 660/-.
TAYLORS DIFFERENTIAL PIECE RATE SYSTEM This system was introduced by Taylor, the father of scientific management. Taylor was of the view that that an inefficient worker had no place in an organization and he should be penalised by paying low piece rate for low production. To encourage the worker to complete the work in standard time, he is given a lower piece rate. Thus if standard production has been fixed at 8 units / day of 8 hours, the higher piece rate for 8 units
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or beyond may be Re. 1/- per unit and lower rate for an output if less than 8 units per day, may be 80 paise per unit. Hence Taylor decided to give a large reward to those who would complete the work within or less than the standard time. The system is very harsh to inefficient workers on account of low rate and low output. Illustration: Calculate the earnings of workers A and B under Straight Piece Rate System and Taylors Differential Piece Rate System. Normal Rate per hour = Rs. 1.80 Standard time per unit = 20 seconds Differential to be applied = 80% below standard and 120% above standard Worker A produces 1300 units per day and worker B produces 1500 units per day. Solution: Standard production per 20 seconds = 1 unit. Therefore per minute = 60 / 20 = 3 units; per hour 3 x 60 = 180 units; per day of 8 hours will be 180 x 8 = 1440 units. Normal rate / hour = Rs 1.80
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Normal piece rate 180 / 180 units = 1 paise Low piece rate below standard production 1p x 80 / 100 = 0.8 paise High piece rate at or above standard = 1p X 120 / 100 = 1.2 paise FOR A: Under straight piece rate system 1300 units @ 1p = 1300 x 1 / 100 = Rs. 13.00 Under Taylors Differential plan 1300 units @ 0.8p = 1300 x 0.8 / 100 = Rs. 10.40 FOR B: Under straight piece rate system = 1500 units @ 1p = 1500 x 1 / 100 = Rs. 15.00 Under Taylors Differential plan = 1500 units @ 1.2p = 1500 x 1.2 / 100 = Rs. 18.00 CHART SUMMARY OF TYPES OF WAGE INCENTIVE PLANS
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GROUP INCENTIVE SCHEMES The incentive schemes discussed earlier can be applied on a group basis also. Group incentive schemes are appropriate where jobs are interdependent. It is difficult to meaningfully measure individual performance and group pressures affect the performance of the members of the group. The chief group incentive schemes are: 1. Profit sharing; 2. Copartnership; and 3. Scanlon Plan. PROFIT SHARING The concept of profit-sharing emerged towards the end of the nineteenth century. Profit-sharing, as the name itself suggests, is sharing of profit of organization among employees. The International Co-operative Congress defined Profit Sharing as: "An agreement (formal or informal) freely entered into by which an employee receives a share fixed in advance of the profits." The basic rationale behind profit-sharing is that the organizational profit is an outcome of the co-operative efforts of various parties, therefore, employees should also share in profits as shareholders
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share by getting dividend on their investment, i.e. share capital. The very purpose of introducing profit-sharing is to strengthen the loyalty of employees to the organization. Thus, profit-sharing is regarded as a stepping stone to industrial democracy. CO-PARTNERSHIP In a way, co-partnership is an improvement over profit-sharing. In this scheme, employees also participate in the equity capital of a company. They can have shares either on the basis of cash payment or in lieu of other incentives payable in cash like bonus. Thus, under co-partnership scheme, employees become shareholders also by having company shares. Now, employees participate in both profits and management of the company. The finer points of this scheme are that it recognizes the dignity of labor and also of a partner in the business. This would, in turn, develop a sense of belongingness among the employees and encourage them to contribute their best for the development of the organization. SCANLON PLAN The Scanlon plan was developed by Joseph N. Scanlon, a Lecturer at the Massachusetts Institute of Technology in USA in 1937. The plan is essentially a suggestion scheme designed to involve the
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workers in making suggestions for reducing the cost of operation and improving working methods and sharing in the gains of increased productivity. The plan is characterized by two basic features. First, both employees and managers can participate in the plan by submitting their suggestions for cost-cutting methods. Second, increase in efficiency on account of cost-cutting is shared by the employees of the unit. The Scanlon plan, wherever adopted, has been successful to encourage a sense of partnership among employees, improved employee-employer management relations, and increased motivation to work. The criticism labeled against group incentive is that the incentive benefits being similar to all members of the group, the best performers may lose incentive. However, this can be overcome if group incentive scheme generates peer-level pressure for superior performance and also reduces the need for supervision. Stability in group may be a necessary condition to make the group incentive scheme successful.
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As regards the ultimate impact of incentives on organizational performance, the research studies conducted in India report that incentive schemes have a positive impact on productivity, labor cost, and industrial relations. It is concluded that "money" has a "salutary" impact on production.
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NON-MONETARY INCENTIVES Non-monetary incentives are the tangible rewards, social practices or job-related factors that are used in an organization to motivate employees without direct payment of cash. In classifying the non-monetary incentives, the breakdown of onthe-job rewards proposed by Meacham and Wiesen provides a framework. According to them, there are two basic categories of rewards: contrived on-the-job rewards and natural rewards. Contrived rewards are tangible incentives that are external to the work, generally involving costs for the organization and generating extrinsic motivation; on the other hand, natural rewards are jobrelated and social incentives that exist in the natural occurrence of events leading to intrinsic motivation. The table includes monetary incentives as contrived rewards as well. Tangible non-monetary incentives refer to the tangible items such as desk accessories, coffee mugs, wall plagues, watches, trophies, rings, tie pins, clothing, gift certificates, key chain, discounted goods, free tickets to various facilities etc.
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The importance of non-monetary incentives in motivating the employees is supported by various studies and mentioned in writings of many authors. Janet Wiscombe (2002) argued that what people really want is to be recognized for making contribution to the job, thus, recognition and praise are among strong motivators. In her opinion, non-cash incentives can not only be cost effective, but also can contribute a lot to raising morale, increasing productivity, improving quality, safety standards and customer service. Non-monetary incentive is the answer that Wiscombe gives to the question of how to maintain and improve worker morale while retaining the costs. Bob Nelson (2001) also supports the view that there is a strong link between non-cash incentives and improved job motivation. He thinks that noncash incentives lower stress, absenteeism, labour turnover and raise morale, productivity, competitiveness, revenue and profit. According to his study, which was conducted from 1999 to 2000, in 34 organizations of U.S.A. ranging from Universal Studios to the U.S. Postal Service, 90.5% of the managers agreed on the idea that recognizing employees helps them better motivate their employees and 84.4% of the managers responded that providing non-monetary recognition to the employees when they do good work helps to increase their motivation and performance.
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On the employees side, the research revealed the fact that for the 77.6% of the employees, it was very or extremely important to be recognized by their managers when they do good work. These findings have further confirmed the importance and effectiveness of non-monetary incentives in the motivation of personnel. In addition to these, Nelson pointed out that cash incentives may have some definite drawbacks. The money employees paid for the job is compensation. He argues that in time, monetary incentives as well are begun to be regarded as rights rather than incentives and the increasing demand for material rewards rapidly is destroying their usefulness as incentives and managerial tools. Another drawback is considered to be related with the decrease in teamwork as employees concentrated primarily on individual cash gains.
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DATA REPRESENTATION, ANALYSIS AND INTERPRETATION
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Question 1 What is the age of the employee? DATA REPRESENTATION

Age of the Employee Less than 20 20 29 30 39 40 49 50 59 No. of Employees 2 27 25 7 3 Percentage 03.13% 42.19% 39.06% 10.94% 04.68%
ANALYSIS More than 80% of the employees are between the ages of 20 and 39. The older employees are mainly at the top of the hierarchal structure. INTERPRETATION This shows that most of the population is fairly young, and will have a young family to support. If the employees remain satisfied, they can be retained by the enterprise for a long length of service.
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Question 2 What is the qualification of the employee? DATA REPRESENTATION

Qualification of the Employee Senior Secondary (10th) Higher Secondary (12th) Graduate No. of Employees 36 18 10 Percentage 56.25% 28.13% 15.62%
ANALYSIS Most of the employees have not attended college, and they mainly form the labour force. The more educated employees are amongst the ones placed high on the organizational hierarchy. INTERPRETATION It can be interpreted that the labour force is not very highly qualified in formal education, though they are well-trained in their vocations. The managers, graders and supervisors are wellqualified with graduation degrees and competence to do their jobs.
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Question 3 What is the gender of the employee? DATA REPRESENTATION

Gender of the Employee Males Females No. of Employees 52 12 Percentage 81.25% 18.75%
ANALYSIS More than 80% of the employees are males. The female employees are present only as a part of the labour force, and the higher levels of management does not have a single female worker. INTERPRETATION Since most of the employees are males, the policies of the enterprise show a more masculine-oriented approach. Hari Om Ginning & Pressing has not hired a single woman with the qualification to be employed at middle or higher levels of management.
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Question 4 What is the length of service of the employee? DATA REPRESENTATION

Length of Service Less than 1 year 1 3 years 3 5 years 5 10 years More than 10 years No. of Employees 12 19 11 13 9 Percentage 18.75% 29.69% 17.19% 20.31% 14.06%
ANALYSIS The numbers of employees belonging to each group are fairly equal in distribution. However, almost 50% of employees have served less than 3 years. INTERPRETATION There seems to be a judicious mix of younger as well as more experienced staff. The higher levels of management have the members who have served longer lengths of service at the enterprise.
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Question 5 What is the marital status of the employee? DATA REPRESENTATION

Marital Status Married Unmarried No. of Employees 48 16 Percentage 75.00% 25.00%
ANALYSIS Most of the employees working with Hari Om Ginning & Pressing are married. Only a quarter of the total employees are unmarried. INTERPRETATION Since the majority of employees are married and have families to support, the incentive policies have to be family-centric. Of the small number that were unmarried, none of them were over the age of 30, and all of them were a part of the lower levels of management and the labour force.
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Question 6 What is the monthly salary of the employee? DATA REPRESENTATION

Monthly Salary Rs. 3001 Rs. 5000 Rs. 5001 Rs. 10000 Rs. 10001 Rs. 15000 Rs. 15001 Rs. 20000 No. of Employees 32 20 10 2 Percentage 50.00% 31.25% 15.63% 03.12%
ANALYSIS There is a clear distinction of salaries as per the level in the organizational hierarchy. The labourers are paid between Rs. 3000 and Rs. 5000, while the two managers are paid in excess of Rs. 15000. INTERPRETATION The basic pay of every employee is determined by his / her level in the organizational structure. The salary scales are wellstructured, and amounts are determined as per position and then seniority.
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Question 7 Do you think that the salary is appropriate for the amount of work? DATA REPRESENTATION
Answer Yes No No. of Employees 49 15 Percentage 76.56% 23.44%
ANALYSIS Most of the employees of the company were satisfied with their salaries and wages, considering the work performed. The ones who were unsatisfied were from the lower levels of management and the labour force. INTERPRETATION Some of the employees may have been hesitant to express their dissatisfaction, fearing that the results of the questionnaire will be revealed to the management. However, most employees were indeed genuinely satisfied with their pay package.
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Question 8 Are you aware of the companys incentive plans? DATA REPRESENTATION
Answer Yes, I am aware. I am party aware. No, I am not aware. No. of Employees 23 31 10 Percentage 35.94% 48.44% 15.62%
ANALYSIS There were very few employees who had full knowledge of the enterprises incentive plans and policies. However, most of them did have some idea about it. Only a small minority were completely ignorant. INTERPRETATION An awareness drive about what the enterprise is doing for the employees as a part of its incentive policies will help most employees gain knowledge about the same, and increase the loyalty towards the enterprise.
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Question 9 Do you fully understand the companys incentive plans? DATA REPRESENTATION
Answers Yes, fully understand. Only partially understand. No, do not understand. No. of Employees 18 29 17 Percentage 28.13% 45.31% 26.56%
ANALYSIS Most employees found it difficult to comprehend the reasons and logic behind the companys incentive policies and plans. There were just a little more than a quarter of the total number of employees who understood these policies. INTERPRETATION An awareness drive about why the enterprise is forming and implementing its incentive policies will help most employees understand the same, and increase the loyalty towards the enterprise.
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Question 10 Would you prefer more monetary or non-monetary benefits? DATA REPRESENTATION
Answers Monetary Non Monetary No. of Employees 44 20 Percentage 68.75% 31.25%
ANALYSIS Majority of the employees would prefer to receive more monetary incentives and benefits rather than the non-monetary ones. The ones who answered non-monetary incentives were amongst those at the higher levels of the organizational hierarchy. INTERPRETATION Only the employees at the higher levels of management preferred non-monetary incentives over monetary ones, since they already have the security of a higher income. Those at the lower levels and with smaller incomes all prefer monetary rewards.
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Question 11 Have you had the inclination to leave the enterprise and work somewhere else in the recent past? DATA REPRESENTATION
Answers Yes No No. of Employees 7 57 Percentage 10.94% 89.06%
ANALYSIS There were very few employees who answered in the affirmative to this question. Most were quite happy to have worked and to continue working for Hari Om Ginning & Pressing. INTERPRETATION While some employees may have been reluctant to answer in the affirmative to this question, there still seems to be an overall feeling of satisfaction amongst the employees to be a part of this enterprise.
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Question 12 Does the management motivate you to work hard for them? DATA REPRESENTATION
Answers Yes Somewhat No No. of Employees 34 27 3 Percentage 53.12% 42.19% 04.69%
ANALYSIS Most employees did answer that the management has been successful to an extent in motivating them to work hard for the enterprise. There was a very small number that did not feel motivated. INTERPRETATION The management has been quite successful in motivating the employees to work hard. They should focus on incentives for the employees at the middle level of the organisational structure, who were not completely motivated.
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Question 13 Are you satisfied with the on-site facilities available? DATA REPRESENTATION
Answers Yes, quite satisfied. Only partly satisfied. No, not satisfied. No. of Employees 35 22 7 Percentage 54.69% 34.38% 10.93%
ANALYSIS Most employees were satisfied with the facilities offered to them on site of their work. Both the managers were only partly satisfied though, and there were a distinct number even in the lower levels of management as well as the labor force, who were only partly satisfied with the facilities. INTERPRETATION The management may want to try and encourage suggestions from employees at all levels of the organizational structure for improvement in the facilities at the work sites, and then work upon the same.
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Question 14 Do you find the attitude of your seniors encouraging and motivating? DATA REPRESENTATION
Answers Yes, very encouraging. Somewhat encouraging. No, not encouraging. No. of Employees 46 14 4 Percentage 71.87% 21.88% 06.25%
ANALYSIS Most employees were happy with the attitude of their seniors, and found it encouraging and motivating enough. There were a very few who answered in the negative to this question. INTERPRETATION Since all of those who answered in the negative were spread in the organizational structure, and worked under different seniors, it can be judged that they are just aberrations, and that the behavior of the seniors is commendable.
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Question 15 Do you find the work environment healthy and congenial? DATA REPRESENTATION
Answers Yes Somewhat No No. of Employees 39 22 3 Percentage 60.94% 34.37% 04.69%
ANALYSIS There was a very small percentage (less than 5%) of employees that did not seem satisfied with the work environment. Most found it healthy and congenial to a certain extent. INTERPRETATION Even if one takes into account the hesitation that some employees may have had in answering this question in the negative, it can still be reasonably concluded that the working environment in the enterprise is a healthy one.
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CONCLUSION
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CONCLUSION Incentives play a very vital role in any organisations human resources management policies. It helps in motivating the employees to perform better, and form a healthy and positive working relationship with the employers. Forming policies with regards to incentives is a very deliberate process, and requires a lot of thought in coming up with the best formula. Incentives need to motivate the employees and spur them on to perform better. If the incentives provided are less than ideal, the employees shall not perform their work efficiently, leave the job, or even have a negative influence on their surroundings. If the incentives provided are more than ideal, the employees may be lulled into a feeling of complacency and lack of effort. Hari Om Ginning & Pressing take the issue of incentives very seriously, and strive hard in trying to find just the right measure of reward to the employees. This can be seen from a study of their policies and the implementation thereof. They have used a combination of monetary and other incentives to get the best results out of their employees, and increase the
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efficiency in their work. While the incentives they provide to the lower tier of employees in the organizational hierarchy are mainly things having a monetary value, the higher tier of employees are some other incentives too. All things considered, the incentive policies of Hari Om Ginning & Pressing are setting a benchmark in the industry, with their thoughtfulness, flexibility and effectiveness. They have improved the performance of the entity over the years, and from the trends that have been seen, they shall continue to do so in the foreseeable future.
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SUGGESTIONS
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SUGGESTIONS From the data collected and its interpretation and analysis, it can be reasonably concluded that the incentive policies and plans of Hari Om Ginning & Pressing are well-made and implemented. Most of the employees have been recorded as being satisfied with the way the enterprise runs, and treats them. However, there is scope for improvement every time. Here are some suggestions for such improvement:
Incentives for Labourers: Even though the Fire Extinguishers have been installed for safety at prominent places, there is lack of knowledge about it amongst the employees. The enterprise must conduct a Fire Fighting Training Program for them, and help increase their awareness and safety standards. The Supervisors, Fitters, Helpers, Oilmen and the Miscellaneous Staff have been provided with the facility of Doctor on Call. Such a facility should also be extended towards the labour workforce since they are also working with the dangerous machines.
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Incentives for Supervisors, Fitters, Helpers, Oilmen and the Miscellaneous Staff: The management should maintain a basic first aid kit at the plant site, so that minor injuries can be attended to immediately and without too much fuss. The tools and equipments used by these employees should be upgraded periodically and have a strict maintenance schedule. There should be a regular quality control check on such tools. These employees should also be made a part of the Fire Fighting Training Program, as suggested above. Incentives for Graders: The facility for personal loans and advances at nominal interest rates that has been extended to the managers should also be provided to the Graders. Incentives for Managers: The Managers must be given greater authority in their respective fields to deal with the day-to-day affairs. With such authority, there will be more responsibility and a better accountability system too. Both the managers were only partly satisfied with the on-site facilities available to them, which suggests that they should be provided with a properly furnished
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office cabin to do their work. It reflects better on their authority and position. The incentive programs and policies of Hari Om Ginning & Pressing can be made more effective and rewarding for both the enterprise and its employees if the afore-mentioned suggestions are paid full heed to.
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BIBLIOGRAPHY
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BOOKS REFERRED
1.
Human Resources Management Human Resources Development Human Resource Training Human Resources Management
S.S. Khanka Dr. K.R. Dixit Pattanayak K. Aswathapaa
2. 3. 4.
WEBSITES REFERRED
1.
http://www.google.com/ http://www.scribd.com/
2.
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Incentives

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Incentives

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CONTENTS Research Methodology Title Selection of Topic Need and Importance of the Study Objective of the Study Hypothesis

Conclusion Suggestions Bibliography

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

INTRODUCTION OF THE TOPIC

To study the effects of monetary and other incentives

INTRODUCTION OF THE TOPIC

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

6. Equitable: This opportunity to all.

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

The total earnings will be calculated as:

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

Guaranteed payment = Rs. 500/- (i.e. 50 Paise / unit)

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives

DATA REPRESENTATION, ANALYSIS AND INTERPRETATION

To study the effects of monetary and other incentives

Question 1 What is the age of the employee? DATA REPRESENTATION

To study the effects of monetary and other incentives

Question 2 What is the qualification of the employee? DATA REPRESENTATION

To study the effects of monetary and other incentives

Question 3 What is the gender of the employee? DATA REPRESENTATION

To study the effects of monetary and other incentives

Question 4 What is the length of service of the employee? DATA REPRESENTATION

To study the effects of monetary and other incentives

Question 5 What is the marital status of the employee? DATA REPRESENTATION

To study the effects of monetary and other incentives

Question 6 What is the monthly salary of the employee? DATA REPRESENTATION

To study the effects of monetary and other incentives

To study the effects of monetary and other incentives