Short-term incentives

Service Business

In some situations, employers want the productivity and efficiency of employees to be raised in a very short time, it is possible through short-term incentives. A crisis in a company, its reorganization, introducing a new product to the market or implementing a new version of a computer system require greater efforts and workload. Projects must be completed on time, and positive effects should appear immediately, as the survival and success of the enterprise may depend on them. Entrepreneurs use short-term incentives to quickly motivate employees. What are such motivators? Can they be permanently included in the incentive system?

Basic and complementary short-term incentives

Short-term motivational stimuli fall into two categories: basic and complementary. The first group of motivating factors is the basis for the short-term improvement of the motivation of the employed people. They cannot be omitted if the employer wants to quickly increase the efficiency of a given employee team. In turn, complementary incentives are an additional engine driving employee productivity. Self-use of this group of factors does not bring much effects. Complementary stimuli can only be included in the incentive system if the underlying stimuli have already been applied.

Short-term incentives

An employer who wants to see the effects of incentives almost immediately should apply the following short-term base incentives:

  • piecework remuneration system - the amount of the employee's salary depends on his performance. Most often, this form of remuneration is used for production tasks. Employed persons are informed about the rate awarded for the production of a given element or product. The more items are prepared, the more the employee will be paid. The disadvantage of the piecework form of remuneration is the deterioration of the quality of the manufactured products, as the employees pay attention mainly to the number of items made,
  • task day - guarantees obtaining a permanent bonus if a specific task standard is achieved. Contrary to the piecework, the task-based working day ensures a minimum wage. An employee may receive an additional bonus if he increases his productivity,
  • commission-based remuneration system - an employee has a guaranteed basic salary, but is able to increase his salary if his work will make a real contribution to the results achieved by the company. Most often, commission remuneration is used in the case of sales representatives and car dealers, who receive a fixed percentage commission for each unit sold.

Complementary short-term incentive

Following the introduction of one of the remuneration systems above, supplementary short-term incentives can be applied. These include bonuses and rewards. The implemented bonus system should be well-thought-out and increase the efficiency of employees. It may happen that obtaining the bonus will not motivate the employed person to make more effort. For this reason, several bonus rules should be applied.

Bonuses and rewards:

  • they should not be greater than the basic salary, as they supplement it, they cannot be awarded systematically or automatically - they should be ad hoc (only occur when there is a real need to increase employee productivity) and selective (awarded to people who can boast of above-average results). work),
  • must be positive, i.e. involve gaining certain benefits, not losing certain privileges,
  • should be awarded after assessing the effectiveness of employees,
  • the date of their awarding should not be too long, as it will not increase employee motivation. Bonuses are intended as short-term incentives.

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Short-term incentives and their impact on employee motivation

Short-term incentives, as their name suggests, affect the motivation of employees in a short time. The employee feels motivated to make more effort, because he is convinced that he will receive a well-deserved reward in a month or a quarter. This type of motivators does not affect the effectiveness of the employed people in the long run. Over time, continuously increasing performance can turn into a rat race. The employer will continue to raise the bar, and obtaining a bonus will require more and more effort. This can effectively demotivate long-term employees who primarily care about personal development, stability of employment and certainty of remuneration.

Short-term incentives usually work for motivating executive employees. People who carry out tasks that require the application of conceptual skills will not be motivated to work more efficiently through work-based bonuses and piecework pay. It is also difficult to establish the standard of work in their case.

Bonuses, piece-work remuneration or task-related days can be used in a period in which the employer wants to improve the company's performance in the short term. Striving for long-term growth of the company's value must be supported by the use of long-term incentives in the incentive system - a package of benefits, remuneration dependent on the value of the company's shares or professional development opportunities.