Incentive system or motivation system

An incentive system or motivation system - the latter term is often preferred - is used when the essential design consideration comes from psychology or leadership theory, and not so much from a microeconomic model in which the party to be motivated is a "soulless" maximizer of economic benefit is.

An incentive system or motivation system is part of the company personnel management system and serves to motivate the people involved. The basis for the design is the psychological and psychosocial process of people as well as the teaching of the organization and management of people.
An incentive system ”(motivation system) is thus part of the personnel management system, whereas a plan to pay premiums, distribute a bonus or involve employees and managers (stock option program) is regarded as part of the compensation. The two approaches are accentuated differently.

• The incentive system focuses on social recognition, praise and awards, perhaps also on competition and an incentive program.

• In the case of bonuses, bonuses and participation, the material aspects are in the foreground.

Therefore, both systems complement each other and they have to be designed simultaneously and in mutual coordination. Both approaches are based on a basic understanding of where and in which areas of responsibility and at which levels the employees of a company can be motivated. Of course, everyone is open to praise and recognition, and of course bonuses are welcome everywhere.

Nevertheless, it can be seen that motivation or participation is particularly important in those areas and levels of a company where decisions have to be made in complex environments and where one can make a task easy on the one hand or proceed carefully and comprehensively on the other.

Motivation is also important where you can still do "everything" with the resources entrusted to you. This is the case when the resources have a high degree of plasticity or malleability (as is the case with money or research time).

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