What financial and non-financial incentives can the company use for employees and agents separately to motivate them? What benefits the company will get from them?

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Solution

1. Incentives for Employees

(i) Financial

(a) Pay and allowances

(b) Productivity linked salary incentive

(c) Bonus

(d) Co-partnership/stock option

(e) Profit sharing

(f) Retirement benefits

(g) Perquisites

(ii) Non-financial

(a) Job security

(b) Status

(c) Employee empowerment

(d) Employee recognition programmes

(e) Employee participation

(f) Career advancement opportunity

(g) Job enrichment

2. Incentives for Agents

(i) Financial

(a) Commission, on every policy sold

(b) Bonus

(c) Stipend/minimum pocket allowance

(d) Performance linked financial incentives

(e) Holiday trips for outperforming agents

(f) Promotion schemes

(g) Cheap home loans for self and family

(ii) Non - financial

(a) Cordial relationship

(b) Career advancement opportunity

(c) Job enrichment

(d) Recognition programmes like certificates of merit, etc.

(e) Status

(f) Special training programmes

Such motivational incentives build strong relationship between company and its employees, agents, etc, and they will contribute more in achieving targets. It will result in more loyal employees and agents and there will be enhanced motivation. Customer satisfaction will increase and will result in increased goodwill of business.

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Questions

1. Identify how the company can supervise its employees and agents effectively. What benefits will the company derive from effective supervision?

2. What financial and non-financial incentives can the company use for employees and agents separately to motivate them. What benefits will the company get from them?

3. How can the company ensure that higher order needs i.e. esteem and self-actualisation as specified by Abraham Maslow are met?

4. Identify the qualities of leadership in this line of business that the company managers must possess to motivate employees and agents.

5. Give a model of formal communication system that the company can follow. Identify the barriers in this model. How can they be removed?

6. How can informal communication help to supplement formal communication model given by you in answer to question 5?

Q. Six Marks Question:
Explain any four non-financial incentives that can be used to motivate employees.

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