What Are Non-Financial Incentives?

The financial incentive mechanism is a mechanism that uses effective financial incentives to coordinate the power relationship between financial entities in the enterprise, stimulates the enthusiasm of participation and enthusiasm of work, and achieves the goal of increasing corporate value.

Financial incentives

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The financial incentive mechanism is to use effective financial incentives to coordinate the power relationship between the financial entities of the enterprise, stimulate the participation enthusiasm and work enthusiasm of the various entities, and improve the enterprise.

The financial incentive mechanism in the governance field affects the enthusiasm of financial governance subjects to participate in corporate governance. The success of the incentive mechanism design has a substantial impact on the effect of financial governance. Specifically, in terms of the design of the financial incentive mechanism for operators, the following aspects are important: ^[1]

1. Internal incentive form ^[2]

Financial incentive mechanism, as the driving mechanism of corporate financial governance, operates around the subject and object of financial governance. Therefore, the goal of financial incentives is to ensure the reasonable allocation and effective operation of financial rights among relevant governance subjects, and to form a comprehensive and check-and-balance relationship. Specifically, the financial incentive mechanism should consider comprehensive incentives for each governance subject, not only focus on one governance subject and ignore other subjects, but also pay attention to the effect of incentive forms on each incentive subject to form checks and balances. For the same incentive object, we must also consider the comprehensiveness of incentives. We must adopt a combination of positive incentives and negative incentives, internal incentives and external incentives, and short-term incentives and long-term incentives. This makes the target system of the financial incentive mechanism more perfect. ^[2]

The principles for establishing financial incentives are as follows: ^[3]

The stakeholder composition of enterprises is very wide, and the needs of each subject are different. Shareholders generally attach great importance to actual monetary returns. Satisfied dividends or capital gains will motivate them to actively delegate power to corporate operators; creditors are usually concerned about the security of creditor's rights, and good debt repayment credibility and satisfactory interest returns can encourage creditors to give companies greater Financial support; employees are generally more sensitive to salary and job security. Satisfactory salary levels and being given appropriate rights will motivate employees to work and increase their enthusiasm for governance. The different needs of various entities make the realization of financial incentives very complicated. The following will focus on how independent directors, operators, employees and creditors can provide financial incentives. ^[2]

1. In terms of incentives, we cannot rely too much or solely on economic incentives. ^[4]

It cannot be denied that the use of economic incentives to mobilize the enthusiasm of employees is necessary, but we should see that the effectiveness of economic incentives is also limited or limited. In real social life, the structure of human psychological needs is very complicated. Although people have needs to improve and improve their lives, money is not everything. In order to meet other needs, many people can reduce it to give up the demand for the economy. It can be seen that economic incentives do not have absolute universality, but only play their incentive role within a certain range and under certain conditions. In addition, when people's living standards are low or even lacking security, the role of financial incentives is more obvious, but when people's cattle live to a certain level, economic demand will be secondary, and the role of economic incentives will also vary. As a result, economic incentives are not absolutely stable and durable. Because of this, the western management community has abandoned a single monetary stimulus in favor of diversified incentives. Special attention should be paid to the fact that economic instruments have both an incentive and a guiding role in values. The simple application of this incentive method can easily make people care about, gain and lose, and even forget the benefits. Therefore, on the one hand, we should correctly understand the effectiveness, limitations and transformation conditions of economic incentives, and use this method in a timely and appropriate manner; on the other hand, we should proceed from the social nature and social conditions of our country and absorb the benefits of western management science. At the same time, it strives to carry forward the traditions and advantages of ideological and political work, and guides the majority of employees with the correct outlook on life, values and ethics, so as to overcome the limitations of economic incentives and curb their negative effects. The enthusiasm of the employees.

2. In the incentive link, we should pay attention to the scientificity of goal setting.

Goals are indeed a key part of the entire incentive process. People's motivation to work hard depends on goals; how people's work performance is measured by goals; what kind of rewards people can get depends on the extent to which they achieve their goals. So West Force. The goal-oriented research direction of motivation theory is reasonable and worthy of reference. In terms of goals, it includes two aspects that are both different and related: one is the work goal; the other is the reward goal. Generally speaking, only when these two goals are set scientifically can the incentive mechanism work properly. Therefore, in the first step of the incentive process, special attention should be paid to the science of goal setting. From the reality of our country, first of all, we should master the difficulty of working goals. The goal of work is to establish the direction of effort for employees, and also a yardstick for measuring enthusiasm and work performance. Therefore, work goals cannot be set too high or too low. If the goal is too high and too difficult, it will reduce employee expectations and affect enthusiasm; on the contrary, if the goal is set too low, it can be easily reached and the goal will lose meaning. Therefore, in management practice, scientific methods should be used to make accurate determinations, and work out goals that are both difficult and can be accomplished by most people through hard work. Secondly, attention should be paid to increasing the amount and effectiveness of reward goals. The purpose of setting reward goals is to promote employees to work hard to achieve the work goals, and to really play a driving role, we must increase the value of reward goals in the minds of employees. Therefore, when there are no reward targets, the problems of arbitrariness and singularity must be overcome, and the in-depth and detailed investigation and research on the needs of employees should be conducted. Based on a careful analysis, the reward targets should be determined based on the employees' needs. At the same time, it is necessary to consider the differences of people's needs, and set up multiple reward methods and reward contents as much as possible, both material rewards and spiritual rewards. If conditions permit, set different reward goals to enhance the amount of reward goals. And effect, in addition, since the value is the subjective judgment of the employees on the value of the reward goals, managers should also guide and correct the values of employees through proper ideological education, so that they can correctly understand the truth of various reward goals Value, which will fundamentally increase the value of the reward goal.

3 In specific implementation, attention should be paid to improving the effectiveness of incentive results.

In modern management, any management measure should focus on efficiency. The efficiency of incentives is generally expressed as the ratio of the effect of incentives to the human, material, and financial resources invested. Since investment has been made to motivate, corresponding measures should be obtained. Incentive effect. Moreover, in the case of the same investment, the effect of incentives should be increased as much as possible, so that incentives become highly efficient. From the perspective of China's management practice, the importance of incentives is generally recognized, and the work of incentives is always ongoing, but there is also a tendency to be formalized and simplified. Many units carry out awards and awards and praise advanced every year, but they are often regarded as a kind of routine work and simplified. They do not actually proceed from the incentive effect, carefully analyze the various factors that affect the incentive effect, and pass in-depth Careful work strives to improve the effectiveness of incentives, so it is often difficult to achieve the intended incentives. It should be noted that, first of all, we must establish the concept of efficiency on the issue of motivation, correctly understand the relationship between purpose and means, motivation and effect, and truly take the achievement of motivation effect and improve the efficiency of motivation as the purpose of motivation work. We will make various specific incentive measures closely focus on this purpose, and strive to obtain efficient incentive results on the basis of necessary investment. Secondly, we should conduct in-depth analysis and research on the incentive process, correctly understand the relevant factors and possible problems of each incentive link, and solve it through appropriate and effective methods to avoid and reduce the "loss" in the incentive process as much as possible to enhance the incentive Timeliness. In short, in the actual implementation of incentive work, we should pay attention to the effectiveness of incentive results. We must take the improvement of incentive efficiency as the starting point and measurement standard of the work, and strive to give play to the effectiveness of incentive investment, so that motivation and effects are unified.