Economic incentives
Economic
incentives are associated with the additional benefits that people receive as a
result of fulfilling the requirements imposed on them. These benefits can
be direct (monetary income) or indirect (free time, allowing you to earn
elsewhere). The main type of economic incentives is basic and additional wages,
bonuses, etc.
General principles of labour remuneration:
- wage growth with increasing employee productivity
- compliance with personal contribution
- the clarity and validity of the payment criteria
- change in the share of remuneration depending on the situation
- use of advanced systems (for example, participation in profits)
- fixing the salary in the contract
Payment of wages can be made:
- according to the tariff model based on fixing for each post a certain official salary considering the possibility of paying extra wages, bonuses, etc. (there is time and piecework)
- in the non-tariff model in which the payment is made based on the final amount of the result, for example, a transaction, a fee for work, etc. also with the probability of receiving premiums, allowances, etc. (there is a commission or floating rates)
The main incentive
element of the salary is the possibility of obtaining a premium proportional to
the result achieved, accenting (grow faster than the result) or levelling
(grows slower than the result).
Principles of awarding:
- remuneration of any, even the smallest, results
- potential unlimited premiums
- a clear relationship between the results and the amount of payments
- excess of the premium over a minimally perceivable threshold
- considering the psychological characteristics of the subject when calculating and changing his premium
- The size of the award can relate to the performance
- directly (with the employee's participation in profits, property, entrepreneurship)
- indirectly (appointed by the head on the basis of his subjectively-objective assessment)
Advantages and disadvantages of economic
incentives:
- Simplicity in applying incentive methods
- Applicability to any groups of employees
- A clear relationship between outcome and reward
- Men always believes that reward is not enough, because
- assesses the work not only from the point of view of the achieved results, but also from the point of view of the forces, time spent on it, etc.
- If in the past there was a reward in a certain situation, a person will try to recreate it again
- Remuneration acts as an incentive only up to certain (and difficult to determine) limits
- A high level of remuneration can attract unskilled labour.
Non-economic incentives
The non-economic
incentives include organizational and moral-psychological incentives.
Organizational Incentives:
Organizational Incentives:
- involvement of employees in participating in the affairs of the organization
- the employee's acquisition of new knowledge and skills
- enrichment of labour
Moral and psychological incentives:
- professional pride
- the presence of a call to show one's abilities
- recognition of the authorship of the result
- high personal and public evaluation
- high goals, encouraging effective or even selfless labour
- psychological atmosphere
- Providing all equal opportunities for self-fulfillment, regardless of position, personal merit, past contributions, etc.
The
link between economic and non-economic motivation is mandatory. A striking
example of this is promotion in a position where the growth of non-economic
incentives (pride, power, etc.) is accompanied by an economic incentive for
salary growth.According to Custom Essay
Writing Services thelabours legislation establishes a fairly high level of
rights and guarantees for employees. It is possible to note the following
advantages of the labour contract as a way of registration of relations on use
of labour of workers:
Ø Stable employment
In
labour relations, the burden of providing the worker with work is entrusted to
the employer, which also carries the risk of lack of work and lack of orders,
as part of the risks of entrepreneurial activity. Labour legislation
guarantees the employee in any case, even in the absence of real work at idle
time, some level of payment. So, for example, in case of idle time for
reasons independent of the employee, he is paid at a rate of not less than 2/3
of the salary or the wage rate.
The
employment contract by general rule is concluded for an indefinite period and
for its dissolution either the consent of the employee or special grounds is
necessary. In the event of violation by the employer of the procedure for
dismissal, the employee can recover through work at the workplace and collect
from the employer earnings for the entire period of forced absence. The
conclusion of a fixed-term employment contract gives the employer an additional
basis for terminating the contract, but not earlier than the expiry of the term.
Ø Regular payment of labour
In
the labour relations, not the result is paid, but the work process for it is
presumed that if an employee goes to work, he performs his labour function and
his labour is subject to mandatory payment. Wages must be paid to the
employee at least every fortnight. In the event of delay in the payment of
wages for more than 15 days, the employee has the right to suspend work for the
entire period prior to payment of the arrested amount by notifying the employer
in writing.
The
terms of payment are mandatory for inclusion in the employment
contract. That is, an interpreter who works under an employment contract
receives a regular salary every month, and in the amount at the end of the year
his income may exceed the fee of an interpreter who works under a civil law
contract, which may not find any orders.
Ø Provision of holidays
The
employee is entitled to an annual paid leave of at least 28 calendar days, and
also cannot be employed during weekends and holidays.
Ø Social insurance
In
accordance with the current legislation, all persons working under an
employment contract are subject to compulsory social insurance in case of
temporary incapacity for work and in connection with maternity. The
employer pays for the employee insurance premiums to the Social Insurance Fund
and the employee receives the right to temporary disability allowance (payment
of sick leave) and maternity benefits (maternity, childcare). Also, the
employee is subject to compulsory insurance against accidents at work and occupational
diseases.
Ø Priority in settlements when liquidating an
organization
In
the event of liquidation of an organization by decision of the founders or as a
result of bankruptcy, settlements with employees whose work is used under
employment contracts are made in the second place, and with those who work
under civil law contracts, last.
Ø Simplified procedure for the protection of rights
If
there is a written employment contract, the burden of proof in court, as a
rule, lies with the employer. The employer is exempt from court
costs. In addition to judicial protection, the employee has the right to
apply for protection of his labour rights.
Ø The ability to unilaterally terminate the
relationship
The
employee has the right to resign at any time at his own request, in advance
(not less than two weeks) in writing notifying the employer regarding it.
