Intrinsic Value of Incentives Compared To Salaries: Can Organization Stop Paying Salaries?

Abstract

This research weighs significantly on challenging the present practice of compensation and rewards. Traditionally or conventionally, the organization reciprocates the gratitude to their employees in monetary terms. Non-monetary rewards being an exclusive section, it is not discussed in this research paper. Among the direct rewards, whether the companies should practice compensating their employees a fixed salary or pay only incentives for the tasks that are achieved? this question may not be welcomed by any employee as it touches the sensitive quotient. Nevertheless, organizations need to understand the right practice in the right era by implementing an intelligent framework. Equity Theory developed by Adams is laid as a foundation to encounter the present unfair reward system. Concurrent mixed-mode method research is done with 162 respondents (quantitative) and 15 respondents (qualitative). Multivariate analysis using SmartPLS 3.3.3 is executed to assess the measurement model and structural model to analyze the covariance between the constructs. The outcome of research claims that it is an ideal practice to implement task-based incentives in organizations rather than paying fixed salaries irrespective of the size or productivity of companies.