ABSTRACT
Financial incentives are used almost universally in the constant drive to improve the productivity of labour. Incentives are used for three main purposes: To persuade people to come to work, To encourage people to work harder when they are at work, and To help people to identify themselves with the objectives of the organization, and hence to work more effectively. Regrettably, profits do not always exist, often for reasons entirely unconnected with the efforts of people in the organization. The ideal condition for profit sharing is when profits slowly and regularly increase from year to year. In times stock options, share issues and profit sharing have been among the financial incentives used by companies to try and create a sense of involvement in their employees, and to enable them to share in prosperity. Economically speaking there is no doubt that industrial harmony is an essential ingredient of profitable operation.
