Explain different financial and non-financial incentives used to motivate employees of a company. (any eight)

Question of 25

Q. Explain different financial and non-financial incentives used to motivate employees of a company. (any eight)

Kerala DhseKerala DHSE Plus Two Commerce Board 2025Subjective· 8mImportance★★★★★

0% · 0/25 Questions

🔒 Locked · start free trial →

You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.

Start your 14-day free trial to unlock the full solution →

Concept understanding — Motivational Techniques

Motivational Techniques — First Principles

Think about the last time you pushed yourself to study when you really didn't want to. Maybe you promised yourself a treat after finishing a chapter. Or you reminded yourself why you're preparing for that exam in the first place. That internal push — that's motivation at work.

Motivational techniques are simply the tools and strategies you use to get yourself (or others) to act, persist, and put in effort toward a goal. They're not magic. They're structured ways of answering one question: How do I make myself do what needs to be done?

The Core Idea: Two Kinds of "Push"

Every motivational technique falls into one of two broad categories:

Intrinsic motivation — you do something because you genuinely find it interesting, enjoyable, or meaningful. The reward is the activity itself.
Extrinsic motivation — you do something because of an external reward (marks, praise, money) or to avoid a punishment (scolding, failure, loss of privileges).

A good technique doesn't just rely on one. The most effective approaches blend both — using external structure to build internal drive.

The Precise Statement

Motivational techniques are systematic methods used to initiate, direct, and sustain goal-oriented behaviour. They operate by influencing either the expectancy (belief that effort leads to success), the value (importance of the outcome), or the affect (emotional state) associated with a task.

In exam-prep terms: you need to believe studying will work, care about the result, and not feel miserable while doing it.

Key Techniques You'll Actually Use

Technique	How It Works	Example
Goal Setting	Break a large task into specific, measurable, achievable steps	"Solve 10 integration problems today" instead of "study maths"
Self-reward	Link completion of a task to a small pleasure	"After finishing this chapter, I'll watch one episode"
Social accountability	Tell someone your plan — the fear of letting them down pushes you	"I'll send you a screenshot of my solved problems by 8 PM"
Visualisation	Mentally rehearse success to build confidence	Picture yourself writing the exam calmly, recalling answers
Pomodoro Technique	Work in focused 25-minute blocks with 5-minute breaks	Reduces the dread of "studying for hours"
Implementation intentions	Pre-decide when, where, and how you'll act	"At 7 AM, at my desk, I will open the physics textbook"

Tip

The single most underrated technique is implementation intentions. Most people fail not because they lack desire, but because they never decide exactly when and where to start. The formula is: "When [situation], I will [action]."

The Psychology Behind It

Two theories explain why these techniques work: …

Start your 14-day free trial to unlock the full solution →

Incentives are of two types. Financial incentives are rewards in money terms — pay and allowances, productivity-linked wage incentives, bonus, profit sharing, co-partnership/stock options, retirement benefits and perquisites. Non-financial incentives satisfy psychological and social needs — status, organisational climate, career advancement, job enrichment, employee recognition, job security, employee participation and employee empowerment. Any eight are explained below.

An incentive is any measure that is used to motivate people to improve their performance. In the Plus Two Business Studies (Directing) chapter, incentives are classified into financial and non-financial incentives.

Financial incentives. These refer to incentives which are in direct monetary form (or measurable in money) and serve to satisfy the economic needs of employees.

Pay and allowances. Basic salary together with dearness allowance and other allowances, along with annual increments, is the basic financial incentive for most employees.
Productivity-linked wage incentives. Wage payment plans that link pay to output or productivity encourage employees to produce more.
Bonus. A sum paid over and above wages, usually linked to performance or profits, rewards good work.
Profit-sharing. Giving employees a share in the profits of the company motivates them to contribute to higher profits.
Co-partnership / stock options. Offering shares of the company to employees at a fixed or reduced price gives them ownership and a stake in the company's success.

(Other financial incentives: retirement benefits like provident fund, pension and gratuity that give security after service; and perquisites such as a car, housing or medical facilities given in addition to salary.)

Non-financial incentives. These focus on the psychological, social and emotional needs of employees rather than money.

6. Status. Giving an employee a higher position, authority, responsibility and recognition satisfies the need for esteem and self-actualisation.

7. Career advancement opportunity. Providing chances for promotion and growth by developing employees' skills motivates them to work harder for higher positions. …

Start your 14-day free trial to unlock the full solution →

Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

Showing the 12 most recent of 38 on this concept.

CBSE 2026Set MARCH1 markMCQ
$Q. Which is the first need as per Maslow's hierarchy of needs?$
(a) (A) Physical needs
(b) (B) Safety needs
(c) (C) Social needs
(d) (D) Esteem needs
›Reveal solutionSolution

Physical (physiological) needs come first in Maslow's hierarchy.

This GSEB Class-12 Commerce directing question tests Maslow's need hierarchy: (1) physiological/physical, (2) safety, (3) social, (4) esteem, (5) self-actualisation. A higher n …

Start your 14-day free trial to see the full solution →
CBSE 2026Set MARCH1 markMCQ
$Q. Maslow's Need Hierarchy Theory is based on certain assumptions. Identify the incorrect statement with respect to these assumptions.$
(a) People's behaviour is based on their needs.
(b) A satisfied need can no longer motivate a person.
(c) People's needs are in a hierarchical order, starting from basic needs to higher level needs.
(d) A person moves to lower level of need only when a higher level need is satisfied.
›Reveal solutionSolution
The incorrect statement is (d), because Maslow's theory moves upward — a higher need becomes active only after the lower need is satisfied, not the other way round.

Abraham Maslow's Need Hierarchy Theory rests on these assumptions:

People's behaviour is based on their needs — satisfaction of needs influences behaviour (statement a is correct).

A satisfied need can no longer motivate; only unsatisfied needs motivate a person (statement b is correct).

Needs are arranged in a hierarchy, from basic physiological needs up to self-actualisation (statement c is correct). …
Start your 14-day free trial to see the full solution →
CBSE 2026Set MARCH1 mark
$Q.____________ is an incentive offered over and above the wages/salary to the employees.$
›Reveal solutionSolution

A Bonus is a financial (monetary) incentive paid to employees over and above their regular wages or salary to motivate and reward them.

…

Start your 14-day free trial to see the full solution →
CBSE 2026Set ANNUAL1 markMCQ
$Q._______ means a process of stimulating people to take action to accomplish desired goals. A) Supervision B) Motivation C) Leadership D) Communication$
›Reveal solutionSolution
Stimulating people to act toward desired goals is the meaning of motivation, so the answer is B) Motivation.

In the directing function of management, motivation means the process of stimulating, inspiring or inducing people to take action and put in their best effort to accomplish desired goals. It arises from a need or motive that drives behaviour. The other options are related but different elements of directing:

Supervision (A) — overseeing subordinates at work. …
Start your 14-day free trial to see the full solution →
CBSE 2026Set ANNUAL1 mark
$Q. Fill in the blank: _______ is the highest level need in the hierarchy of needs. (Physical/Self Actualisation)$
›Reveal solutionSolution
The highest need in Maslow's hierarchy is Self Actualisation, so that fills the blank.

Maslow's Need Hierarchy Theory, used in the directing chapter to explain motivation, arranges human needs in five levels from lowest to highest:

Physiological (basic) needs

Safety/security needs

Social/affiliation needs

Esteem needs …
Start your 14-day free trial to see the full solution →
CBSE 2026Set ANNUAL1 mark
$Q. What is positive motivation?$
›Reveal solutionSolution

Positive motivation means motivating people to perform better by providing rewards and incentives.

Positive motivation is a technique of motivation in which employees are induced to improve their performance by holding out the promise of rewards — both financial (bonus, increment, incentive pay) and non-financial (praise, recognition, promotion, appreciation). The employee works willingly and enthusiastically in the expectation of gaining these benefits. It is the opposite of negative motivation, which uses fear or threat of penalty (such as demotion or punishment) to make people work. Posit …

Start your 14-day free trial to see the full solution →
CBSE 2026Set ANNUAL1 markMCQ
$Q. Maximum incentive giving function of management of employes is:$
(a) Staffing
(b) Motivation
(c) Organisation
(d) None of these
(a) Staffing
(b) Motivation
(c) Organisation
(d) None of these
›Reveal solutionSolution

Motivation is the function that gives the maximum incentive to employees, so the correct option is "Motivation."

Management performs five broad functions — planning, organising, staffing, directing and controlling. Directing is the function concerned with guiding, supervising and leading subordinates, and motivation is the specific element inside directing whose job is to stimulate people through rewards. Staffing is about acquiring the right people and organisation is about structuring work and authority — neither is primarily about giving incentives to employees who are already on the job. Only motivation is built around inducing people to act better through reward, both financial (pay rise, bonus, profit-sharing, perks) and non-financial (recognition, status, job enrichment, growth opportunity).

…

Start your 14-day free trial to see the full solution →
CBSE 2026Set ANNUAL1 markMCQ
$Q. After completion of two years of services, John was confirmed as a permanent employee. Which Maslow’s need is being satisfied?$
(a) Esteem
(b) Security
(c) Self-actualization
(d) Social
›Reveal solutionSolution
Confirmation as a permanent employee satisfies the Security (safety) need in Maslow's hierarchy.

Abraham Maslow's Hierarchy of Needs ranks human needs as: (1) Basic/physiological needs, (2) Safety/security needs, (3) Social/affiliation needs, (4) Esteem needs, (5) Self-actualisation needs.

Security needs include protection from economic/physical harm, including job security and stability of income.

Esteem needs relate to recognition, status, and respect.

Social needs relate to belonging, friendship, and acceptance by a group.

Self-actualisation is about realising one's full potential and creative growth. …
Start your 14-day free trial to see the full solution →
CBSE 2025Set MARCH1 markMCQ
$Q. The Motivation theory which classifies needs in hierarchical order is developed by __________.$
(a) Fred Luthans
(b) Scott
(c) Abraham Maslow
(d) Peter F. Drucker
›Reveal solutionSolution

The correct answer is (c) Abraham Maslow, who gave the Need Hierarchy Theory of motivation.

…

Start your 14-day free trial to see the full solution →
CBSE 2025Set ANNUAL1 markMCQ
$Q. Maximum incentive giving function of management to employees is (A) Staffing (B) Motivation (C) Organisation (D) None of these$
›Reveal solutionSolution

Motivation is the management function that provides the maximum incentive to employees.

Motivation means inducing people to work willingly and with enthusiasm towards organisational goals. It does this through incentives, both monetary (pay, bonus) and non-monetary (recognition, promotion, job security). Staffing and organising are important functions too, but it is motivation that directly offers incen …

Start your 14-day free trial to see the full solution →
CBSE 2025Set ANNUAL1 mark
$Q. "Motivation is an internal feeling." How?$
›Reveal solutionSolution

Motivation is an internal feeling because it springs from a person's own needs and desires.

Motivation is the inner urge that moves a person to act. It is called an internal feeling because it originates within the individual — from unsatisfied needs, wants and desires (such as the need for food, security, status or recognition). These inner urges create a drive to work in a particular way; they cannot simply be injected from outside, …

Start your 14-day free trial to see the full solution →
CBSE 2025Set ANNUAL1 markMCQ
$Q. Motivated employees are rewarded$
(a) Negative
(b) Positive
(c) Intrinsic
(d) None of these
›Reveal solutionSolution

Motivated, good-performing employees are rewarded with positive incentives.

Incentives are of two kinds: positive (rewards such as pay rise, bonus, praise, promotion, recognition) which encourage good behaviour, and negative (penalties, demotion) which discourage undesirable behaviour. Employees who are motivated and per …

Start your 14-day free trial to see the full solution →

←Previous chapterCh 6Staffing

Q.Explain different financial and non-financial incentives used to motivate employees of a company. (any eight)

🎓Unlock everything free for 14 days

Unlock everything free for 14 days