05.FINANCIAL MOTIVATION AND REWARDS FOR EMPLOYEES

 

In human resource management is offer the financial motivation and rewards involve using monetary incentives like bonuses, raises, and profit-sharing to motivate employees and recognize their contributions, which can improve performance and engagement. Financial rewards are tangible incentives, typically monetary, used to recognize and motivate employees for their performance, achievements, or contributions. 

Many types of Financial Rewards:

• Salary Increases: Regular rises based on performance or cost of living adjustments. 
• Bonuses: One-time payments for achieving specific goals or targets. 
• Commissions: A percentage of sales or revenue earned, directly tied to individual performance. 
• Profit-Sharing: A portion of the company's profits distributed to employees. 
• Stock Options: Giving employees the opportunity to purchase company stock at a predetermined price. 
• Retirement Plans: Contributing to retirement accounts like 401(k)s or pensions. 
• Health Insurance: Providing or contributing to employee health insurance premiums. 
• Tuition Reimbursement: Covering the cost of educational courses or degrees.
• Gift Cards: Providing employees with gift cards for specific purchases or experiences. 
• Paid Time Off (PTO): Offering additional days off for vacation or personal time. 
• Flexible Work Options: Allowing employees to work remotely or adjust their work schedule

Mr.Abraham Maslow was a psychology professor at Brandeis University. He was an introduced the Maslow's hierarchy theory for Financial Motivation and Rewards, This shape of pyramid.

Maslow's Hierarchy of Needs Pyramid

Maslow’s hierarchy of needs is often presented as a pyramid of needs. The pyramid is organized from the most basic needs at the bottom to the most complex at the top. 

Physiological needs

Physiological needs are the most basic of Maslow’s hierarchy. These are the essentials people need for physical survival. Examples include air, food, drink, shelter, clothing, warmth, sleep, and health. 

If you fail to meet these needs, your body cannot function properly. Physiological needs are considered the most essential because you can't meet the other needs until your physiological ones are fulfilled. The motivation at this level comes from a person’s instinct to survive.

Safety Needs

Once you meet your physiological needs, you need to need a safe and secure environment. Safety and security needs are associated with the need to feel safe and secure in your life and environment. Safety needs are obvious starting from childhood. When these needs are not met, children naturally react with fear and anxiety.

These needs also involve the desire for order, predictability, and control. Examples of safety needs include emotional security, financial security (social welfare and employment), law and order, social stability, freedom from fear, health, and well-being.

Love and belonging needs

This is the third and the last of the lower needs in Maslow's hierarchy of needs. It involves the need to feel a sense of belonging and acceptance. It's motivated by the natural instinct of humans to interact. This hierarchy level involves romantic relationships and connections to family and friends. It also includes the need to feel that you belong to a social group. In addition, this need includes feeling loved and feeling love toward others. If you fail to meet these needs, you may experience loneliness and depression.

Esteem needs

This is the first of the higher needs in the hierarchy of needs. Esteem needs are motivated by the desire to feel good about yourself. 

There are two categories of esteem needs: Self-esteem, which is feeling confident and good about yourself, and respect, which is feeling valued by other people and knowing that they recognize your achievements.

When your esteem needs are not met, you may feel unimportant, less confident, unprotected, and incompetent. According to Maslow, respect and reputation are vital for children and adolescents and come before real self-esteem or dignity.

 Self-actualization needs

Self-actualization needs are the highest level on Maslow's pyramid of needs. These needs include realizing your potential, self-fulfillment, self-development, and peak experiences.

Self-actualization is the desire to accomplish all that you can and unleash all your potential. Different individuals may have different ideas of self-actualization since your desires differ from other people’s.

Maslow’s theory states that reaching the self-actualization level is difficult. The reason is that people are focused on satisfying the more urgent needs in the hierarchy of needs first.

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Medically Reviewed by Smitha Bhandari, MD on September 26, 2024Written by Lori M. King, PhD