Incentives, Institutions, and Human Behavior
An organization is an entity that consists of different segment, polices, traditional and culture, which define and differentiate them from others. Incentives in an organization or a company entail the programs that are geared at ensuring that employees are motivated and satisfied with their work. Production in the organization is dependent on the input of the workers and in order to ensure that the objectives of the organization are met, incentives plays crucial role in motivation. Particular incentives direct individual immediate behaviors towards a particular goal if the incentives offered are the strongest of all the competitive incentives provided. Therefore, in offering incentives organization should go for those incentives that will trigger positive behaviors among their employees.
According to Geoffrey, an institution refers to structures, which are important in the social realm of lives; they are systems of established and prevalent social rules, which guide or define the social structures (3). For instance, money, language, laws, table manner, systems of weights and measures, firms, and any other organization make up institutions. Therefore, these institutions are able to create stable expectations of behavior among individuals and in ensuring that they achieve certain goals. These institutions can constrain or enable behavior; behavior can be constrained through the existence of rules, and some time would allow choices and actions that would not be in existence (Lee 281).
On the other hand, human behavior refers to a range of traits or behaviors exhibited by human beings. Several factors including, attitudes, culture, emotions, values, authority, ethics, rapport persuasion, genetics, and coercion among many other factors influence these behaviors (Moldovan 101). In an organization context, human behaviour may be is triggered by the culture of the organization, motives of objectives of the firm, rewards, values among others. Production output in an organization is based on the human capital. Therefore, the way in which organization has socialized and motivated their employees will contribute to the success or failure of the organization.
Incentives, institutions, and human behavior, are important components of an organization. They work hand in hand, and where the employees are provided with incentives, they will be motivated and satisfied hence leading to increased performance and productivity. The incentives provided in the organization are also important in ensuring that the employees socialize and interact positively as they pursue to achieve or meet organizational objectives. Human behavior is also one important factor that determines the level of performance (Mie, & David 395). Organization culture, rules and procedures that govern people in institution, may determine or have an influence to the behavior of the employees. Therefore, organizations should seek to establish favorable organizational climate in order to promote positive behaviors in their employees.
Incentives are important in an organization since they affect the institutions and human behaviors either positively or negatively. Examples of incentives include monetary and non-monetary motivational factors. Financial rewards is a example of monetary incentives while non financial rewards includes provisions of good working environment, good leadership, appreciation, recognition of employees for their efforts, promotions and many others. To illustrate the importance of these incentives in the institutions and human behaviour, Chester Barnard quotes will form the basis of the discussion (Peter and James 4). He holds the view that contribution of an individual efforts constitutes the overall energies of an organization that are yielded as a result of individual due to the incentives. He further added that, dominating forces are hinged on the egoistical motives of self-gratification and self-preservation as organizations fully exists when there is consistency with the satisfaction of these motives. Therefore, individual are the sole strategic factors in any organization and regardless of his obligation or history he must be induced to cooperate as there can be no cooperation without individual will (Peter and James 4). Based on this quotes, there is close relationships of incentives as a motivation or as a contributor to the change of human behaviour. People or employees in an organizational context may be induced to perform or act in a certain manner if appropriate incentives are provided to them.
Incentives by nature and definition are scarce. The scarcities of these incentives to the organization enable them to induce employees towards certain levels. In the case, these incentives are not rare they cannot provide inducement and change of behaviour among employees and institutions. For instance, for an institution to consider a certain program effective and as an incentive it should be rare or provide a window of opportunity that comes their way rarely. If the government decided to reduce taxes on certain categories of products that the company imports, this will be a rare incentive to the company and it should be utilized in a better way to ensure maximum benefit. On the other hand, incentives such as promotions of individuals in the organization should be competitive and carried out occasionally to demonstrate or show the value of promotion and a sense of appreciation of their contributions in the company. This will enhance hard work and will stimulate competition, as people will be able to work hard to create good record that will make them preferred candidates the next time such opportunity arises.
In an organizational context, the social status, prestige, and respect are unequally distributed depending on the kind of the organization. For instance, the membership may represent upward movement while at the same time imply degradation to others from high social status to low. This demonstrates that incentives have diminishing marginal utility as they may vary according to the institution and behavior of the humans. For instance, individual that have been socialized in a culture or an environment where they have been praised and recognized every time they perform better, may feel this privilege is denied when they go to an organization where there efforts are not recognized. Therefore, this will demonstrate degradation of their value and status, triggering change of their behaviour, either by becoming lazy or demanding for recognition. Likewise, when organization, which had, not earlier put in place motivational programmes to motivate their employees, upon instituting these programs, may trigger the organization and the human behavior towards a certain trend. Such employees will feel appreciated and motivated to work extra hard.
In giving out these incentives, organizations should ensure that incentives output does not exceed the available incentive resources. Even though these incentives help in changing and motivating human behaviors in the way of behaving, socializing and performance, organization should not for instance pay their employees excessive of what they can afford as this may jeopardize their operations and even render them bankruptcy. Incentives should be provided when the company is convinced that, the initiative will not affect its status of operations or affects its effective delivery of services. Therefore, the company may come up with more affordable and easy strategies that will not compromise with its performance and survival. For instance, the company may use non-monetary strategies as their incentives such us provide small gifts and organize small parties, which seeks to recognize those that are doing or performing better. Such initiatives, although, appear to be small and insignificant, they can assist in enhancing positive relationships in the organization between the employees and the firm owners. Therefore, it is important to note that whatever incentives in whatever measures, it is important and can change the perception and behavior of employees (Peter and James 5)
Organizational leaders and executive know the importance of incentives in ensuring sustainability and achievement of their objectives. Therefore, they endeavor to ensure that they pay any excess or surplus production or profits to their members or workers as motivational strategies. This enables the human capital to be motivated to work hard towards achievement of the goals and objectives of the company. Without such incentives, the human capital will not be triggered towards increasing their performance and this may result to failure to fulfill the objective.
Incentives can be distinguished from one another. They can be classified into three categories; material, solidary and purposive incentives. Material incentives are tangible rewards with a monetary value or can be easily translated into monetary. They include money in form of salaries, wages, tangible benefits to a taxpayer association to its members, fringe benefits obtained from labour unions among many others. Solidary incentives are intangible with no monetary value and are not easily convertible to monetary value. They vary as they are derived from acts of association such as sense of group membership and association, socialization, identification, congeniality, status emanating form membership, fun, and maintenance of social distinction among many others (7). On the other hand, purposive incentives are also intangible and are derived from the needs of association. They are found in the suprapersonal goals of organization such as elimination of corruption, ensuring efficiency and undertaking beautification activities of them company surroundings among many others.
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