Incentives in Money

Since the beginning of the labour relations, money has been the most common of kind of incentive used by the employers around the world. These were rewards paid to employees if their production exceeded a predetermined level. It has always been efficient through many years; moreover, this form of incentive is especially popular in underdeveloped countries, particularly in the lowest levels of the organisations. In addition, the popularity of these incentives was based on that they were the easiest way to recognize the labour of one or more employees, because it didn’t need big studies or any other effort by the employers. For instance, if a boss felt pleased by the work of an employee, it did not find out about its necessities and simply had an amount of money and was given it.





As the organisation were growing and being developed, the employees and their necessities too. In the middle of 50s, money like incentive started to lose effectiveness, the use of traditional rewards was declining in the developed countries for many reasons, among them we have:





First, money provides a limited reinforcement on the behaviour, since, as soon as it is spent, it fades of the memory of the worker. Usually a few weeks later they do not remember the incentives and the wished effect is not obtained. Also, the incentives by reward occasionally can be unfair, due to the lack of a real measurement between the effort of the workers and the amount of the money for the reward. Furthermore, this kind of incentive can make antagonisms between different departments in the organisation, or also, between its hierarchical levels. Since all the department and levels are involved in the production process, seldom the reward is distributed between all of them.





Likewise, the use of this form of incentive, alter group dynamics, because the workers try that its department or hierarchical level outstanding more than the others departments, and in...