Incentives are monetary benefits paid to workmen in recognition of their outstanding performance. They are defined as variable rewards granted according to variations in the achievement of specific results.
Advantages of Incentive based compensations
- Incentives are important for inducement and motivation of workers for higher efficiency and greater output.
- Employee earnings go up
- Enhanced standard of livings of employees
- Reduction in total unit cost of production,
- Productivity increases.
- Production capacity is also likely to increase
- Reduced supervision