Explain any four financial incentives generally used in an organization.

Answer – Financial incentives can be expressed in money and reward performance or service.

• Pay and allowances: basic salary and related allowances meet regular financial needs.
• Productivity-linked wage incentives: additional payment is linked to output or performance.
• Bonus: an additional reward over normal wages, according to the applicable arrangement.
• Profit sharing: employees receive a share of profits, aligning interest with organisational results.
• Co-partnership or stock options: employees obtain ownership interests under specified conditions.
• Retirement benefits: provident fund, pension or gratuity support future security.
• Perquisites: benefits such as housing, medical facilities or transport add value beyond cash salary.

For example, a clearly defined output bonus can encourage greater productivity, provided quality and safety standards remain protected.