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Effect of Incentives on Employee Performance

LINOVHR.COM  In running a business, challenges and problems will always be in line with the times. Especially in the management of human resources. Management is encouraged to find the right solution to solve existing problems 

You may read this article of LINOVHR in Bahasa Indonesia - Pengaruh Insentif Terhadap Kinerja Karyawan

Starting from the problem of decreasing the level of discipline, unfair competition among fellow employees, lack of technological knowledge so that it is unable to adapt to the company environment, high employee turnover, until the declining employee performance that causes losses for the company, both in material and non-material terms.

However the conditions are, the success of a company is very dependent on the utilization of quality human resources. That is why it needs to be given an appreciation of the performance of employees so that they are more eager to work and provide the best contribution to the progress of the company. One of them is the incentive policy.

Then, what exactly is incentive? How does the incentive affect employee performance in a company?

What are incentives?

Incentives are one of the rewards given by a company to employees for the performance that has been done in the form of financial and non-financial with the aim to motivate, encourage, and increase employee contributions to the progress of the company.

Although it is not mentioned in the Manpower Act, the term incentive is actually the same as the benefits provided in Labor Law No. 13 of 2003.

How Influence of Incentives on Employee Performance?

As discussed on the Forbes website, the provision of incentives is one of the most effective motivational techniques for improving employee performance. Here are the reasons.

1. Increase Employee's Passion so as to Keep Their Motivation High

In fact, the provision of short-term incentives is very capable of motivating their performance. Imagine if you provide incentives in the long run, what will happen? Of course, employees will be increasingly motivated and feel valued so as to create the positive passion that they channel at the company.

Gambar dari LINOV HR
Gambar dari LINOV HR

2. Incentives can Build Emotional Connections Incentives are an effective way that a company leader or manager can motivate employees. The approach taken by a company leader will further enhance good relations with employees so that there is a communication of values ​​and trust emotionally.

3. Binding Incentives Will Make It Easier to Achieve Company Goals 

Offering incentives to employees who have achieved job targets faster or achieved certain achievements is a way for a company to make it easier to achieve its goals.

In fact, someone who gets recognition and feels a part of something bigger than themselves is pride. That is why giving incentives should be bound so that employees are more enthusiastic in their work.

4. Incentives only work if the company culture is strong 

You need to know that incentives should be given to a company that already has a strong positive culture. If you apply incentives in a corporate environment that is already poisonous, you will worsen the situation there.

Company leaders must be wiser with more intense approaches to their employees so that new ideas and ideas can be implemented for positive results and advancing the company.

5. Incentives Are Available because Appreciation for Human Attitudes is Very Important
Of course, the effect of incentives on employee performance will have a positive impact on them. This is in line with Abraham Maslow's Hierarchy of Needs theory, where at the highest level of hierarchy, employees will feel a need for self-actualization (Self Actualization Needs). Automatically, employees will develop their abilities to the maximum extent possible because there is an appreciation from the company for their performance results.

6. Incentives Considered As Perception of Justice

When a company experiences progress and increases in terms of revenue, each part will experience an increase. Starting from the addition of equipment and work equipment, the addition of overtime hours, until the recruitment of new employees.

That is why, some employees who have tried hard to advance the company are also entitled to get an additional percentage of their work performance, thus, giving incentives is also seen as a perception of fairness for employees.

7. Incentives Do Not Always Have to Be a Money, Adjust to the Needs of Employees

As discussed in the previous paragraph that the provision of incentives does not have to be in the form of money. Adjust to the needs of your employees. You can start asking the Human Capital Management section, what does employee A need, and what does employee B need?

The appropriateness of giving incentives to employees will also make your employees feel more valued because you understand very well what are the main needs of your employees.

The HR you have is a high-value asset. Providing incentives to your employees is an effective investment to improve the quality of their performance. Also has a positive impact on increasing company profits 
(Source LINOVHR)

Judul Asli
Pengaruh Insentif terhadap Kinerja Karyawan 


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