Incentive
Incentives refers to special measures or incentives in connection with economic activities that are intended to motivate employees or customers to act in the interest of the incentive giver.
aims
In most cases, the goal of incentives is to increase sales, increase profits or reward.
- Purchase and decision-making incentive for customers
- Promotion of employee motivation
- Increasing morale within a company
- Increase in employee loyalty
- Reduction of employee absenteeism
- Promotion of team spirit
- Reduction in personnel costs
- Bonding of employees (and possibly also their families) to a company
- Increase the sales of a product or service
- Branding
Types of incentives
Incentives are cash bonuses, material bonuses, bonus programs (e.g. Payback ), trips, special events, praise, titles (career advancement) or company cars.
Incentive trips
The characteristic of an incentive trip is the leisure-oriented character of the trip, which differs from a real business trip . Participation in incentive trips is usually linked to the fulfillment of a goal (e.g. sales figures, results, purchase) within defined periods of time according to the “if-then” principle. This keeps the risk for the organizer low, as the successes are achieved in advance. Incentive trips are often city or adventure trips where the team spirit is to be strengthened at the same time through challenging community activities (e.g. rallies, treasure hunts, hiking, climbing).
Incentive events
These are company events. These events are usually organized by specialized (event / travel) agencies or event companies. In contrast to other company events, such incentive events are often particularly pompous in terms of location, catering and entertainment so as not to miss the desired effect. Public awards and honors for well-deserved employees are therefore an integral part of the program of such events.
effect
The effect and economic advantages of incentives are controversial, although increases in motivation have been demonstrated. From an economic point of view, a gift as a performance incentive for employees only makes sense if the costs are below the expected increase in productivity. This is the result of the Research Institute for the Future of Work (IZA). Companies allow incentives to cost around 5,000 to 25,000 euros.
Treatment of income tax law
Incentives in the form of money are treated as income subject to tax and social security. In Germany, other incentives are so-called “ pecuniary benefits ” that the employer must treat like remuneration. See also § 37b EStG . From a tax law perspective, incentive trips are defined as follows in a decree issued by the Federal Ministry of Finance on October 14, 1996:
“Incentive trips are granted by a company in order to reward business partners or employees of the company for their services and to motivate them to perform better or to the top. The travel destination, accommodation, means of transport and group of participants are determined by the company granting the trip. The course of the trip and the individual events serve general tourist interests. "
Web links
Individual evidence
- ^ Daniel Grosse: Carrot for Employees. In: Focus , September 11, 2007. Retrieved February 22, 2015.