Question

What are the three advantages of Short-Term incentives?

Answer 1

Short term incentive are called annual incentives and they reward the employees for achieving the short term business goals of the company.

The first advantage is that it serves as a huge motivation for the employees and they are encouraged to achieve and fulfill their targets.

The short term incentives are financially self supporting because the incentives are funded by the additional funds raised by way of extra sales of the business.

It reduces the staff turnover because people are more loyal to the company and they do not feel under compensated. Since there is a direct proportion between performance and rewards the high performing employees stay with the company.