Incentives: characteristics, types and application at work

Incentives are stimuli that make a person more motivated work, study, do certain actions, etc. They are used in a multitude of fields.

In this article, we will talk about the incentives applied to the business sector: employment incentives. We will know its definition, its fundamental characteristics, the different types of incentives that exist and how they work. On the other hand, we will see what functions they have in addition to increasing the motivation and performance of workers.

    Incentives: what are they?

    An incentive can be defined as anything that causes a person to improve in certain aspects or tasks. It can also be seen as a reward or a benefit after achieving something; that is, it is something that motivates the person to do a certain action better or faster.

    Incentives can be used in different fields and disciplines (education, psychology, therapy …); but here we will talk about the incentives that apply in the workplace. In this field, they are also widely used, especially to achieve an increase in the performance of the person, as well as his productivity.

    In other words, they aim to achieve better results in the organization, as well as an improvement in the well-being or satisfaction of the worker and a better working environment. For example, an incentive would be to offer an additional economic bonus for each “X” number of sales.

    His origin

    The first author to start talking about employment incentives was Frederick W. Taylor, American industrial engineer and economist, When the movement of the Scientific Organization of the Work began in the middle of Century XIX. Taylor argued that workers’ effort increased when they received incentives based on their productivity.

    On the other hand, the scientific organization of the work that Taylor creates with his collaborators, alludes to a system of organization of work which consists in dividing the tasks of the production processes.

    This system, in fact, was peculiar to industrial organizations (Taylor is understood to be an engineer), and the purpose of it was to increase the productivity of workers. Thus, as we have already argued, Taylor came to find, after having applied and studied his system under different conditions, that the incentives made workers work harder and therefore that productivity also increased.


    Employment incentives can be of different types, as we will see later. However, they all share the same goals: improve worker performance and productivity, As well as your personal satisfaction within the company.

    This satisfaction will result in an increase in your motivation and will make you happy at work; all this interests the company, because, on the one hand, it takes care of the well-being of its workers, and on the other hand, it takes care of the company. In other words, both parties win.

    On the other hand, not all incentives work the same for all workers; which means according to the worker, one incentive will be effective and another will not. So while one worker may be content with a pay rise as an incentive, another will be content with more vacation days, and another with more benefits, etc.

    In other words, each person will benefit from one or the other incentive to motivate themselves and increase their productivity at work. This is why the employer or the human resources professional should know detect these different needs and motivations of your staffIn order to be able to assign each worker the type of incentives that are most effective in each case.


      Employment incentives can be of different types. There are different classifications, but the most generic and accepted is the one that divides them into economic and non-economic incentives:

      1. Economic incentives

      These are incentives that involve economic or monetary remuneration. Examples of them are salary increases, additional salaries, commissions, bonuses… In other words, anything that involves a raise in salary or additional money. These are the most commonly used incentives.

      They can have a significant impact on the worker as well as his productivity, especially if their economy is not particularly good. However, as we have seen, not all incentives serve the same for all workers.

      2. Non-economic incentives

      Non-economic incentives they include all measures that improve the working conditions of workers.

      These types of incentives are much more varied than the previous ones, and include a wide variety of examples (tangible and intangible), such as: restaurant vouchers, contributions to pension plans, life insurance, flexible working hours, medical insurance, transport assistance, canteen or nursery for children, assistance with continuing studies (training), fruit days at the office, etc.

      Non-economic incentives they are increasingly used by companies, And offer an additional appeal to the working conditions of the position.

      Application and functions at work

      We have seen how work incentives can be of different kinds, and how they are not equally effective for everyone; thus, they must be tailored to the needs and preferences of each worker to be effective.

      But what exactly happens with the administration of effective workforce incentives? It’s more than just improving worker productivity. Let’s look at its most notable features:

      1. Increase productivity

      The main purpose of incentives, as we have pointed out, is to boost productivity, through increased motivation of employees.

      2. Attract talent

      However, the purpose of the incentives goes much further and can also be very useful in attracting good profiles to the company. In addition to attracting them, they will also serve to retain, And that the staff are knowledgeable.

      3. Promote the promotion system

      The incentives, by attracting good profiles, also strengthen the company’s promotion system, because the most promising workers will increase thanks to these promotions, without going to work in the competition.

      4. Filter the employees who do not match

      On the other hand, the incentives they also allow you to discern and filter which employees are the best match for the company and which are not.As workers who feel in tune with the dynamics and philosophy of the company (this includes their incentives) are more likely to continue working there.

      5. Improve the working climate

      If workers are comfortable in the company (this is in part due to the administration of incentives), the work climate is more likely to be more relaxed, more pleasant and closer.

        6. Reduce absenteeism

        Motivation at work has been shown to decrease absenteeism, sick leave, etc., and this motivation may be due in part to the type of incentives that the company offers to its workers.

        7. Reduce costs and work accidents

        Finally, it has also been proven in studies such as incentives they can influence the reduction of costs and work accidents in the company, in addition to the mistakes of workers.

        Bibliographical references:

        • Gil Rodríguez, F. and Alcover, C. (2003). Introduction to organizational psychology. Alliance: Madrid.
        • Muchinsky, P. (2000). Psychology applied to work. Ed. Parainfo Thomson: Madrid.
        • Peiró, JM (1991). Organizational psychology. Volume 1. UNED: Madrid.

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