Step 1: Understanding the Concept:
Motivation is the process of stimulating people to action to accomplish desired goals. Managers use "Incentives" to achieve this motivation.
Incentives are broadly classified into two categories:
1. Financial Incentives: These are direct monetary rewards or benefits that can be measured in terms of money. They satisfy the basic physiological and safety needs (food, shelter, savings).
2. Non-financial Incentives: These are psychological or social rewards that provide mental satisfaction, status, or security. They satisfy higher-order needs like esteem and self-actualization.
Step 2: Detailed Explanation:
Analyzing the provided options:
(A) Bonus: This is an extra cash payment made to an employee over and above their basic salary, usually during festivals or for reaching a performance milestone. Since it is a direct cash transfer, it is a financial incentive.
(B) Profit Sharing: In this scheme, a percentage of the company's net profit is distributed among the employees. This results in more money in the employee's bank account, making it a financial incentive.
(D) Commission: Common in sales, a commission is a variable component of pay based on the volume of sales achieved. It is purely monetary and thus a financial incentive.
Why Job Security (C) is the correct answer:
Job security refers to the assurance that an employee's job will remain stable and they will not be dismissed unexpectedly.
While a secure job provides peace of mind, the "security" itself is not a payment.
It is a "psychological" incentive because it reduces the fear of the future and creates a sense of belongingness and stability.
While it has great value, it cannot be quantified as a specific dollar or rupee amount in a paycheck, classifying it as a non-financial incentive.
Other non-financial incentives include status, organizational climate, career advancement opportunities, and employee recognition programs.
Step 3: Final Answer:
Job security is a non-financial incentive because it addresses the psychological and emotional stability of the employee rather than providing a direct monetary benefit.