Question

PLEASE GIVE AN IN DEPTH EXPLATION WITH REASONING! one paragraph or more

Why are effective reward and incentive programs important for the modern corporation? Give reasons for your answer

Answer 1

Effective reward and incentive programs important for the modern corporation, due to following reasons:

1. Employee morale: Effective rewards and incentive programs boost employee morale and help them stay motivated and deliver superior performance while at work. Employees are the basic units of the firm (big or small). When employees are regularly motivated by the rewards for their good performance like monetary incentive, paid leaves, they tend to work harder and help in high-quality value creation for the firm.

2. Performance improvement, drive growth: The highly and regularly rewarded employees tend to work harder and achieve more targets than non-rewarded ones. The sales firms tend to link the incentive with the number of conversions of the employees and hence motivate them to work harder and achieve higher salaries on monthly basis.

2. Maslow's law: As per Maslow's hierarchy of needs, the employees need to satisfy their esteem and sense of belonging needs while staying and working comfortably in an organization. Reward and recognition systems help them to satisfy these needs and accept the organization as their own.

3. Employees as investors: Many firms resort to rewarding their employees with shares in the firm and make them owners of the firm's stake. This is a very helpful tool for value and growth strategy as invested employee work for the betterment of the firm and try to work harder so that market valuation of the firm rises and hence trading price per share increases, thereby increasing their profits. Some of the examples of equity-based employee appraisal plans used by the firms globally are Employee Stock Ownership Plans (ESOPs), Phantom shares, sweat equity and Stock appreciation rights (SAR).