ECONOMICS
INCENTIVES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Participation profit
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Additional bonus
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Insurance
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All of the above
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Detailed explanation-1: -Bonus, pay and allowance and profit sharing are all types of financial incentives.
Detailed explanation-2: -A financial incentive is defined as: a monetary benefit offered … to encourage behaviour or actions which otherwise would not take place. A financial incentive motivates actions which otherwise might not occur without the monetary benefit.” ➢It is a policy instrument for the State.
Detailed explanation-3: -There are two types of incentives: financial and non-financial incentives. Financial (monetary) incentives are payments or rewards that are given in exchange for achieving certain goals or targets. Non-financial incentives are non-monetary rewards, such as awards, privileges, or recognition.
Detailed explanation-4: -Compensation incentives. Compensation incentives tend to cover some of the more basic incentive options. Recognition incentives. Reward Incentives. Appreciation incentives.
Detailed explanation-5: -Economic Incentives – Material gain/loss (doing what’s best for us) Social Incentives – Reputation gain/loss (being seen to do the right thing) Moral Incentives – Conscience gain/loss (doing/not doing the ‘right’ thing) 15-Jun-2014