Incentive

IncentiveIn general, incentives are anything that persuade a person to alter their behavior in the desired manner. It is emphasized that incentives matter by the basic law of economists and the laws of behavior, which state that higher incentives amount to greater levels of effort and therefore higher levels of performance.
An incentive is a powerful tool to influence certain desired behaviors or action often adopted by governments and businesses.
Incentives can be broadly broken down into two categories: intrinsic incentives and extrinsic incentives. Overall, both types of incentives can be powerful tools often employ to increase effort and higher performance according to the “law of behavior.”
Incentives are most studied in the area of where economic analysts, such as those who take part in human resources management practices, focus on how firms make employees more motivated, through pay and career concerns, and performance evaluation, to motivate employees and best achieve the firms’ desired performance outcomes.
An intrinsic incentive is when a person is motivated to act in a certain way for their own personal satisfaction without seeking any external reward, nor facing any external pressure to perform the task. For instance, a singer who enjoys singing may be intrinsically motivated to spend several hours a day to improve their performance without receiving any recognition or awards from others. Often, intrinsic incentives are useful in increasing one’s empowerment, utility level, and autonomy and can reinforce employees’ work involvement and commitment.