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      HomeProductsHRMIncentive Is: Purpose and Benefits For Employees

      Incentive Is: Purpose and Benefits For Employees

      As a worker or employee, you should know what incentive is. No worker or employee does not like incentives. Usually, an exemplary and outstanding employee or worker will get incentives from the company.

      To help companies manage incentives and loyalty programs effectively, use HRM software to automate all administrative processes related to tracking performance, calculating bonuses, and distributing rewards.

      Besides increasing employee morale, incentives or bonuses can also motivate other employees to give their best performance to the company, making the company profit. However, offering prizes to employees needs to be done thoroughly with careful consideration because it must also adjust to the company’s conditions.


      Table of Content:

        Definition of Incentive

        The incentive is additional income in the form of money, goods, or so on to increase work enthusiasm. KBBI also interprets this as encouragement money. Giving this bonus is different from providing the basic salary, which is already the right of the employee to get.

        The purpose of giving this is so that employees can work more optimally because they feel the results are more appreciated. With employees working more enthusiastically and motivated, the company will also get more incredible benefits. In addition, the company’s productivity will also increase.

        Therefore, the benefits of incentives are beneficial for both employees and the company. However, the provision of salaries and bonuses must still be different. Even though they are in the form of remuneration for services, they both have other functions and roles. Salary is the fundamental right of employees already working in one company.

        Meanwhile, incentives motivate or stimulate employees to increase their performance. The bonus amount is usually not fixed and requires careful consideration based on the achievements and wages of employees. This provision usually also occurs at one time and can be disbursed outside the regular schedule of salary payments.

        download skema harga software erp
        download skema harga software erp

        Types of Company Employee Incentives

        The following are the types of company employee incentives based on their form:

        Financial incentive

        This type of reward is in the form of money and the basic salary that employees receive. Usually, this type of incentive calculation is based on company profits and matters related to employee welfare such as old-age insurance, recreation, health, and so on.

        In addition, you can manage your company’s finances with the Accounting System from HashMicro.

        Non-financial incentive

        As the name suggests, this type of reward is not in the form of money. Generally, this type can be promoted, a positive and constructive work environment, and a good working relationship with superiors. In addition, there are also other bonuses, commonly social incentives that relate to better co-workers.

        One such social incentive could be the provision of weekly meal prep services. This incentive can add significant value to an employee’s work-life balance, taking away the stress of cooking from their daily task list and giving them more time for relaxation or other personal matters.

        Furthermore, gifts to keep your staff motivated can be an effective way to show appreciation for their hard work and dedication. Therefore, the reward is not always in the form of money, but it can also be in other states.

        Objectives and Benefits

        The provision of incentives has many purposes and benefits for both employees and companies. The main goal is to increase the performance or productivity of employees and the company. With this goal, employees and the company will get mutually valuable employee benefits such as:

        Benefits for employees

        • Motivation

        Getting more profits is one of the advantages for companies when their employees have good performance and productivity. Therefore, incentives can also increase employee motivation because they feel the company appreciates their performance. However, the provision of incentives is not only financial. In terms of work ethic, this can also build employee morale to work harder by providing the best for the company.

        • Retribution

        Employees can assess employee achievements and efforts qualitatively and quantitatively. For this reason, incentives can be a sign of remuneration for the hard work that employees do in the form of specific bonuses. This can make employees work harder and improve their abilities to get the reward.

        So, bonuses do not only function as encouragement or motivation for employees. However, it can also serve as a token of remuneration to help the company achieve its goals quickly and precisely.

        Benefits for the company

        • Employees will work harder.

        With increased employee motivation, they will work harder to get bonuses from the company. When the company routinely gives prizes to the best employees, the employees will compete to work with enthusiasm in providing their best performance. This will also make the company profit because the company’s productivity will also increase.

        You can also automate various aspects of your company or business with an ERP System.

        • Employees are more disciplined.

        When employees already have a good work ethic, the competition in getting incentives is to improve performance, be more disciplined and creative. This will make the company have resources that can compete and increase the company’s productivity significantly.

        How to Provide Incentive Effectively

        To reduce the company’s potential losses due to providing excessive incentives, here are some ways or indicators that companies can consider before giving bonuses, namely:

        • Employee performance and achievements. This is the primary consideration for the company before giving bonuses is the performance and achievements of the employee for the company.
        • Work efficiency. It is the responsibility of employees whether the work they do can be completed more quickly and effectively or not.
        • Fairness and worthiness. Companies also need to pay close attention to the right or eligibility of employees to receive bonuses. If the company ignores it, this will cause losses for the company.
        • Position or seniority. The company should also calculate the nominal amount of the bonus based on the place or seniority or the employee’s service period to the company. The needs and needs of employees in improving the quality of life can also be a consideration for companies in providing bonuses.


        Companies need not worry about potential losses in providing incentives. If the company manages and does it well, there will be many impacts and benefits for employees and the company. Giving bonuses or incentives can take many forms such as money, promotions, goods, recreation, and others that can increase motivation or work passion.

        However, companies also still need to be careful and consider before giving bonuses to their employees. Because if you are not careful, the company and employees will suffer losses from providing excessive incentives.


        In addition, you can also use the HRM System from HashMicro, which can manage your employees’ activities. This system allows you to manage payroll, attendance lists, and other operational activities. In addition, with HRM Software, you will also be able to manage recruitment, KPI, training, employee evaluation, and employee loans with just one application.

        The system can also be integrated with the competency management system that can assist you in managing employee skill imbalances and effectively identifying potential workers. Try the free demo and switch to HashMicro now!

        Chandra Natsir
        Chandra Natsir
        A content writer with a strong interest in writing and technology. Chandra is dedicated to writing useful, entertaining, and relevant information for readers, and he continues to develop content that connects and inspires them.

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