Non-material incentives for staff

FINANCIAL AND NON-MATERIAL INCENTIVES FOR STAFF

Material incentives for staff

Material incentives are a complex of various kinds of material benefits received or appropriated by personnel for an individual or group contribution to the results of the organization’s activities through professional work, creative activity and the required rules of conduct.

Consequently, the concept of material incentives includes all types of cash payments that are used in the organization, and all forms of material non-monetary incentives. To date, the following types of direct and indirect material payments are used in domestic and foreign practice: salary, bonuses, bonuses, profit sharing, additional payments, deferred payments, participation in equity capital (Fig. 1).

The central role in the system of material incentives for labor belongs to wages. It remains the main source of income for the vast majority of workers, which means that wages will continue to be the most powerful stimulus for improving the results of labor and production as a whole.

Rice. 1 Structure of financial incentives

The essence of wages is revealed through a number of its main aspects:

1) wages are the price of labor power, corresponding to the cost of consumer goods and services that ensure the reproduction of labor power, satisfying the material and spiritual needs of the employee and his family members;

2) wages are part of the income of an employee, a form of economic realization of the right of ownership to the labor resource belonging to him;

3) wages – this is the share of net output (income) of the enterprise, depending on the final results of the enterprise and distributed between them in accordance with the quantity and quality of labor expended, real labor contribution.

The regulation of personnel remuneration requires its appropriate organization, on the one hand, providing guaranteed earnings for the fulfillment of the labor norm, regardless of the results of the enterprise, and on the other hand, linking earnings with individual and collective labor results. The organization of wages at the enterprise is understood as the construction of a system for its differentiation and regulation by categories of personnel, depending on the complexity of the work performed, as well as individual and collective labor results, while ensuring guaranteed earnings for the fulfillment of the labor norm.

An effective organization of remuneration implies the observance of certain principles (Fig. 2), which serve as economic guidelines in the material incentives for employees, in the organization of remuneration.

The elements of the organization of remuneration at the enterprise include labor rationing, conditions of remuneration, forms and systems of remuneration (Fig. 3).

Labor rationing is a mechanism for establishing the necessary quantitative result of labor activity (or labor costs). They can be the norms of costs and results of labor, the workload and the number of employees, the duration of working hours, the duration of the production cycle, etc. Labor rationing allows you to determine how much labor costs should correspond to the established amount of its payment in specific organizational and technical conditions. The labor norm determines the amount and structure of labor costs required to perform this work, and is the standard with which to compare

Rice. 2. Basic principles of the organization of wages in a market economy

actual labor costs are measured in order to establish their rationality. The most widely used norms are time, production, maintenance, number, manageability, standardized tasks.

The terms of remuneration depend on the quality of work and working conditions. These include a billing system, various options for non-tariff assessment of the complexity of labor and the qualifications of performers (analytical scoring of activities, jobs; certification of employees; qualification levels; labor cost coefficients, etc.). As additional tools, you can use incentive and compensatory surcharges and allowances that take into account

Rice. 3. Elements of the organization of remuneration

differences in working conditions, its intensity, modes, natural and climatic conditions, etc.

The regulation of labor and the conditions of remuneration are only the basis for establishing the amount of wages. For their practical use, a clear algorithm is needed for the dependence of wages on labor standards and indicators characterizing the quantity and quality of labor expended. This dependence is reflected through the forms and systems of remuneration.

In the organization of remuneration at the enterprise, wage systems are designed to ensure that the quantitative and qualitative results of labor are taken into account when determining the amount of earnings and the material interest of employees in improving the results of work and the results of activities of the enterprise (institution, organization).

All remuneration systems, depending on which main indicator is used to determine the results of labor, are usually divided into two large groups, called piecework and time-based forms of remuneration (Fig. 4).

The time-based form of remuneration assumes that the amount of an employee’s earnings is determined on the basis of the time actually worked and the established tariff rate (salary).

With a piece-rate form of remuneration, wages are accrued to the employee based on the amount of actually manufactured

Rice. 4. Forms and systems of remuneration

products (the amount of work performed) or the time spent on its manufacture.

Piece-time (mixed) systems of labor work include elements of both piece-rate and time-based forms. These include Taylor systems; Bart Merrick; Gann ta; Atkinson; Halsey.

The choice of one or another form of remuneration is determined by the characteristics of the technological process, the nature of the means of labor used and the forms of its organization, as well as the requirements for the quality of products or work performed.

Comprehensive consideration of these conditions can only be carried out directly at the enterprise. Therefore, the choice of forms and systems of remuneration is the competence of the enterprise.

As practice shows, the most effective in certain production conditions is the form of remuneration that contributes to the growth of production, improvement of the quality of products (services), reduction of their cost and obtaining additional profit, ensuring the most complete combination of the interests of workers with the interests of the enterprise team and the employer.

To the base part of wages can be established P>-payments and allowances, which are an integral part of the development of conditions for remuneration. Their application is due to the need to take into account, when paying, the additional labor costs of employees, which are of a fairly constant nature and associated with the specifics of certain types of labor and areas of its application, and in this regard, it is aimed at creating the interest of employees in increasing additional labor costs and compensation for these costs by the employer.

Currently, more than 50 types of additional payments and allowances are used in the country’s economy. Surcharges and allowances are divided into those guaranteed by labor legislation (mandatory for use) and optional, determined by local regulations (regulations on remuneration, collective agreement, regulations on personnel, etc.).

The most important direction of material monetary incentives is bonuses. The bonus stimulates special improved results of labor, and its source is the material incentive fund. The main characteristic of the premium as an economic category is the form of distribution according to the result of labor, which is personal labor income, i.e. the premium belongs to the category of incentive systems.

The premium is unstable, its value may be greater or less, it may not be accrued at all. This feature is very important, and if the premium loses it, then with it the meaning of the bonus as a material incentive is lost. The use of bonuses as a powerful incentive tool should ensure a prompt response to changing conditions and specific production tasks.

Along with material monetary incentives, there are also those that are of material value, but in real terms are presented in the form of special benefits and compensations – the so-called benefits, which together form a social package. Benefits and compensations can be either guaranteed by the state or voluntarily provided by the enterprise to its employees.

The structure of material non-monetary incentives includes several groups of incentives, the purpose and composition of which are presented in Table. one.

Benefits and compensations are a special form of employee participation in the economic success of the enterprise. In the modern economy, the condition for the success of an organization is not only profit maximization, but also the social security of the employee, the development of his personality. In this regard, we can highlight a number of tasks that the organization seeks to solve by voluntarily providing its employees with benefits and compensation:

– alignment of the goals and needs of employees with the goals of the organization;

– development of a special psychology among employees when they identify themselves with their organization;

– increasing productivity, efficiency and quality of work and the readiness of employees to work effectively for the benefit of the organization;

– social protection of employees at a higher level than provided by law;

– creating a positive microclimate in the workforce;

– formation of a positive public opinion about the organization as an employer and strengthening its positive image among employees.

The system of material incentives is organically complemented by non-material incentives.

Table 1. Material non-monetary incentives

Groups of material non-monetary incentives Purpose Compound
Complementary working conditions Providing the means of labor required at the workplace / position, not provided for in the regulations for the equipment of the workplace – full or partial payment for cellular communication; – provision of transport or payment of transport costs; – portable personal computer; – payment of hospitality expenses
Social Freeing up employee time to improve the efficiency of working time – transportation of employees (to/from work); – non-state pension provision; – Compensation for the cost of children’s holidays; – obligatory medical insurance; – provision of material assistance; – compensation (full or partial) of the cost of food and catering; – compensation (full or partial) of the cost of sports
Image Increasing the status of an employee within the company and outside it – provision of a company car for travel to business meetings, negotiations, business trips, etc.; – catering in a separate room for senior management; – ordering light snacks, drinks at the workplace; – additional medical insurance under the expanded program (dentistry, hospitalization, planned surgeries); – additional medical insurance for family members; – organization and payment of expensive holidays; – full reimbursement of the cost of membership in the fitness club
Individual Attracting/retaining valuable professionals – provision of consumer loans/guarantee to the bank for urgent needs; – provision of loans / guarantee to the bank for the purchase of housing; – tuition payment; – provision of vouchers to resorts and rest houses; – provision of corporate housing / compensation for the cost of renting housing

Non-material incentives for staff

As potential non-material incentives, all moral, moral-psychological, social and organizational values at the disposal of the subject of management, which are adequate to the socially conditioned needs of the individual, can be considered. Any incentives for labor activity can be classified as intangible, with the exception of monetary and non-monetary material remuneration of personnel.

The meaning of the concept of “non-material stimulus” combines everything that, necessarily reflected in a person’s feelings and mental images, at the same time really affects the spiritual, moral, ethical, aesthetic needs and interests of the individual. The intangible in stimulation is based on knowledge of the psychological foundations of human behavior in labor and understanding the importance of labor activity in meeting the highest (social) human needs (Table ).2

Table 2. Human needs and characteristics of motivation developing on their basis

Need Characteristics of the motivation of behavior aimed at meeting the need
In reaching Do something difficult. Manage, manipulate, organize – in relation to physical objects, people or ideas. Do this as quickly and independently as possible. Overcome obstacles and achieve high performance. Improve yourself. Compete and get ahead of others. Realize talents and thereby increase self-esteem
In respect Admire the superior and support him. Praise, commend, exalt. Willingness to be influenced by others. Have an example to follow. Obey custom
In dominance Control the environment. To influence or direct the behavior of others – suggestion, temptation, persuasion, direction. Dissuade, restrict, prohibit
In support Satisfy needs with the compassionate help of a loved one. To be the one who is taken care of, supported, surrounded by care, protected, loved, who is given advice, who is led, who is forgiven, comforted. Stay close to a dedicated guardian. Always have someone around to support
In affiliation Close contact and interaction with loved ones (or those who are similar to the subject himself or love him), give pleasure to the object and win his affection. Stay true to friendship
Need Characteristics of the motivation of behavior aimed at meeting the need
In understanding Ask questions or answer them. Interested in theory. Meditate. formulate, analyze, summarize
In exhibition Make an impression. To be seen and heard. Excite, surprise, enchant, entertain, shock, intrigue, amuse, seduce
In autonomy Break free from bonds and restrictions. Resist coercion. Avoid or stop activities prescribed by despotic authoritarian figures. Be independent and act according to your impulses. Not to be bound by anything, not to be responsible for anything. Ignore conventions
In aggression Strength to overcome opposition. Attack, insult, show hostility. Fight. Revenge for insults. Resist with violence or punish
In opposition In the struggle to master the situation or compensate for failures. By repeated actions, get rid of the humiliation of defeat. Overcome weakness, suppress fear. Wash away shame with action. Look for obstacles and difficulties. Respect and be proud of yourself
In defense Protect yourself from attacks, criticism, accusations. Hush up or justify mistakes, failures, humiliations.
To avoid damage Avoid pain, wounds, disease, death. Avoid dangerous situations. Take precautionary measures
Avoiding shame Avoid humiliation. To avoid difficulties or situations in which humiliation, contempt, ridicule, indifference of others is possible. Refrain from taking action to avoid failure
in custody Show compassion and help the defenseless in meeting their needs – a child or someone who is weak, exhausted, tired, inexperienced, infirm, defeated, humiliated, alone, dejected, sick, in difficulty. Help in danger. Feed, support, console, protect, patronize, heal
In order To put everything in order, to achieve cleanliness, organization, balance, neatness, accuracy, accuracy
In Game Act “for fun” – for no other purpose. Laugh, joke. Seek relaxation after stress in pleasures. Participate in games, sports activities, dancing, parties, gambling

The main directions of non-material incentives for personnel are moral stimulation, organizational incentives and incentives for free time. The priority of choosing one or another direction of non-material incentives in the practice of working with personnel depends on the situation in which and for what purpose they are used, as well as the extent to which the goals of the management bodies correspond to the interests of employees.

Moral stimulation of labor activity is the regulation of the employee’s behavior on the basis of objects and phenomena that reflect social recognition and increase the employee’s prestige.

Stimulation of this kind sets in motion a motivation based on the realization of the need to express gratitude and be recognized. The essence of regulation is the transfer and dissemination of information about the results of labor activity, achievements in it and the merits of the employee to the team or organization as a whole.

Methods of moral incentives for personnel are presented in Table 3.

Table 3. Methods of moral stimulation of personnel

Groups of methods of moral stimulation Methods of moral stimulation
Systematic informing the staff Extended meetings: – meetings of the labor collective; – presentations of successful projects; – organized internal PR; – purposeful ideological work; – local corporate media (newspaper, magazine, website, local information network); – corporate identity (business accessories with company symbols, branded clothes), etc.
Organization of corporate events professional competitions; master classes; labor competitions; corporate holidays; event activities; team building activities (team building), etc.
Official recognition of merit Submission to state, professional and public awards; awarding honored employees with certificates, diplomas, corporate awards, valuable gifts, vouchers, sums of money (status awards); mention at meetings, public events; Hall of Fame
Managing relationships in a team Use of democratic leadership style; scientifically substantiated selection, training and periodic certification of leading personnel; recruitment of primary units, taking into account the factor of psychological compatibility; the use of socio-psychological methods that contribute to the development of effective mutual understanding and interaction skills among team members, etc.

In essence, all of the above methods of moral stimulation are of an informational nature, being information processes in which the source of information about the merits of employees is the subject of management, and the recipient of information about the merits of employees is the object of stimulation (employee, group, staff of the organization). The communication channel is the means of information transmission (visual, verbal).

The forms of evaluative information about a person and the methods of its transmission determine the content and effectiveness of the use of a moral stimulus. Moral stimulation should form positive motivation, create a positive mood, a favorable attitude towards work, team, organization, increase the importance of work in a person’s life and the value of the organization.

Organizational (labor) stimulation is the regulation of an employee’s behavior based on a change in the feeling of job satisfaction. Satisfaction with work as an evaluative-emotional attitude of an individual or a team to the work performed and the conditions for its flow is formed due to the relationship of private satisfactions with certain aspects of working life: satisfaction with the organization, content and productivity of labor, decent working conditions, satisfaction with the quality of working life, remuneration, relationships in the team, etc.

Of particular importance in this regard is the content of labor as a complex characteristic of labor (professional) activity, reflecting the diversity of labor functions and operations performed in the course of labor activity. Labor activity can intrigue a person with the unknown, the mystery of the end result (for example, the result of an experiment for a scientist or research for a geologist) or the complexity of the task being solved, which seems to challenge the person’s pride (“can I or can’t I?”). A professionally interested person experiences pleasure not only in solving a difficult problem, but also in putting efforts into the process of solving, in search of the most productive option. Work in this case is carried out for its own sake and is not only a means to an external goal.

Knowing the pleasure of the process and the result of the work (task), a person looks forward to the possibility of such pleasure in the future, which will encourage him to perform this activity again. The employee expects a reward in the form of intense positive emotions, joy and pleasure from work as an interesting activity, and his labor enthusiasm is manifested in a feeling of complete (mental and physical) involvement in the activity, full concentration of attention, thoughts and feelings in practice. A person knows how to act at one or another moment of work, since he clearly realized the goals of the activity and is not afraid of possible mistakes and failures.

Methods of organizational incentives for staff are presented in table. 4.

The methods of organizational stimulation listed in the table are aimed at changing the feeling of satisfaction of employees with their work in this organization. The peculiarity of work as the basis of a person’s lifestyle is that job satisfaction largely determines life satisfaction and is an integral indicator of a person’s social well-being. Replacing a person with a machine in routine, low-intellectual operations, enriching and enlarging labor, promoting employees at the professional and job levels, involving them in the process of managing their work and the organization as a whole, the employer forms a more developed socially stable personality of a worker of the 21st century.

One of the urgent problems of a modern working person is the total lack of free time. The active development of the economy, competition in the labor market for many professions, the growth of information flows – all these objective factors increase the value of such an incentive as “free time from work”, and force us to look for ways to compact working time, look for reserves – for development, mastering the latest technologies, professional and personal growth, to create a family, for friends, hobbies, recreation, sports. Therefore, the relevance of using such an important incentive as free time in the system of managing the motivation and incentives of the organization’s personnel is obvious.

Free time stimulation is the regulation of employee behavior based on changes in the time of his employment. The essence of incentives is to provide the employee with real opportunities to realize professional interests without prejudice to personal life, family, health and recreation. The growth of the material well-being of society, the level of development of world science, culture, art, information technology leads to the expansion of the range of interests of modern man, who finds

Table 4. Methods of organizational incentives for personnel

Groups of organizational incentive methods Organizational incentive methods
Improving the quality of working life Improving the organization of work; enlargement of the scope of work; expansion of the content of the corpse; intellectualization of labor functions; professional development and training of personnel; improvement of working conditions and equipment of workplaces; ergonomics and interior design
Career Management Planning, motivation and control of individual professional development and promotion of employees; organizing the acquisition of the necessary level of professional training; search and support of talents; encouraging creativity and initiative; assessment and analysis of the results and methods of activity, personal and professional qualities of employees
Involvement of personnel in the management process Formation of self-governing autonomous collectives; encouragement of voluntary associations of workers in groups to solve the problems of the organization; providing opportunities for group discussion of upcoming decisions; operational change (rotation) of jobs and operations; combination of professions; delegation of authority; organization of feedback; reduction of labor regulation; providing freedom to dispose of resources (equipment, materials, finances); equity participation of personnel in the ownership of the enterprise (ensuring participation in ownership); use of idea reward schemes (the scheme is effective if people know how to make suggestions, believe that their proposals are expected to be noticed, considered and rewarded)
Organization of labor competitions professional competitions; reviews of professional skills; competitive master classes of leading experts; blitz tournaments; competition of teams – working groups, teams, departments, branches, business units, departments – for achieving great results, saving time or resources

living outside the plane of professional labor activity. Many workers today need free time to take advantage of everything that life gives them in a modern highly developed society, to combine work and personal life without compromising the latter, and so on.

The purpose of stimulating free time is to encourage employees for high labor productivity and labor productivity, for achieving labor success by providing special employment conditions: providing additional rest time, establishing flexible working hours, and using flexible forms of employment (Table 5).

Management activities in the field of non-material incentives should be aimed at solving the following main tasks:

– attracting highly qualified personnel, young specialists to the organization, providing the organization with personnel of the required quality, quantity and at the right time;

– reduction of staff turnover;

– formation of a favorable socio-psychological climate and a productive working environment in the primary teams and in general in the organization;

– formation (strengthening) of the organization’s image as a favorable employer;

– formation and maintenance of organizational culture.

Table 5. Methods of stimulation with free time

Groups willows incentive free time Free time stimulation methods
Providing extra rest time – Unscheduled one-day paid vacation; – addition of additional days to vacation; – additional paid vacation; – sabbatical; – additional leave without pay
Establishment of flexible working hours – Permission to self-regulate the total length of the working day. working week, working year, subject to the obligatory observance of the general norm of working time; – application of methods of division of work; – rotational-expeditionary form of work
Application of flexible forms of employment – Temporary and seasonal employment; – free lance – home work; – agency work; – work of the administrator on the home phone; – self-employment, etc.

Material and non-material incentives should actively complement each other in the personnel incentive system, which will become effective if it is based on a set of legal norms that fix managerial methods and means of influencing personnel in order to strengthen the motivation for lawful behavior and encourage the development of the necessary for the organization (and / or society) forms of relations.

Conclusion

The effectiveness of one or another motivational system in practice largely depends on the governing bodies.

Now it is hardly necessary to convince anyone that motivation is a fundamental factor in inducing workers to highly productive work. In turn, the functioning of motivation systems, their development mainly depend on the employees of the management apparatus, on their qualifications, business qualities and other qualitative characteristics.

The activation of the activities of the managerial personnel of a modern enterprise is one of the most important functions of management.

The use of various forms and methods of incentives will allow the management of the company to form an effective motivation of managerial personnel for effective activities, which, in turn, will contribute not only to the functioning, but also to the development of the enterprise. Therefore, the economic activity of the enterprise largely depends on the proper organization of financial and managerial work at the enterprise.

The success of any company largely depends on how fully and accurately the real state of affairs in the field of enterprise management was analyzed. You can not save on the wages of good workers and equipping their jobs. It is also necessary to develop a system of non-material incentives at the enterprise. Improve relationships within the workforce. Today, the need to solve the problems of the interest of each person in high-quality and creative work for the benefit of the enterprise and society is becoming more acute.

The stimulation of employees is influenced by the social policy pursued by the management of the enterprise.

It is advisable to proceed from the following principles for building a system of social benefits for employees:

1) it is necessary to identify the material and non-material needs of employees;

2) it is necessary to fully inform employees about the social benefits provided to them, as well as about their additional, in addition to state benefits, nature;

3) provided social benefits must be economically justified and applied only taking into account the budget of the enterprise;

4) social benefits that have already been provided to employees by the state should not be applied at the enterprise;

5) the system of social benefits should be understandable to employees and each employee should know for what, for what merits he is entitled or not entitled to this or that benefit.

To strengthen the stimulating role of wages, it is advisable to observe the following principles:

1. the dependence of wages on the efficiency, productivity and quality of work performed in order to ensure the interest of employees in the results of their work;

2. introduction of flexible payment systems based on taking into account the final results of the organization’s work and the individual contribution of the employee, including participation in profits;

3. exclusion of equalization in the payment of employees;

4. When creating a system of remuneration for employees, provide for strengthening its unifying role, excluding confrontation between employees.

According to the premises of this theory, the best way to stimulate labor is economic motivation.

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