Managers and executives often are rewarded by their organizations for their perf

Question

Managers and executives often are rewarded by their organizations for their performance and how that performance impacts on the entire organizations. Firms use several forms of short-term and long-term incentives to reward their managers and executives, but do these incentives achieve the desired effects? Discuss the use of short-term and long-term incentives and express your opinion on which ones are effective and which ones are not. Defend your answers. Managers and executives often are rewarded by their organizations for their performance and how that performance impacts on the entire organizations. Firms use several forms of short-term and long-term incentives to reward their managers and executives, but do these incentives achieve the desired effects? Discuss the use of short-term and long-term incentives and express your opinion on which ones are effective and which ones are not. Defend your answers.

Explanation / Answer

Short term incentives are given to motivate the employees to achieve short term goals or a project etc. Short term incentives are generally given in addition to the long term incentives. The structure of long term incentives remains more or less the same over the time. Whereas the structure of short term incenctive might keep changing based on the tasks and goals at hand.

Short term incentives motivate employees to achieve short term goals. Long term incentives help in increasing over all performance of the employees , reduce attrition, helps in retaining the talented work force and increases the overall satisfaction of the employees. Both short term and long term incentives have their own benefits.

But for both the short term and long term incentives, targets set have to be realistic and achievable. If not, employees would be demotivated and wouldn't put any extra effort.

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