Amrita completed her Master’s Degree in Fashion Technology from Paris. After coming back to India, she observed a shift towards formal wear in the fashion industry. To grab this opportunity, she opened a boutique in a posh area of Delhi.
She used environmental friendly method of production. To make the store run efficiently, she divided the work into small tasks so that her employees are well trained and the wastage can be reduced. Similar activities were grouped together and departments were formed.
She assigned responsibility to her sales staff in the form of clear cut targets and gave them authority to close the deal by offering a discount of 5% but the decision to give any further discount rests with her. The departments were headed by the specialists who were appointed through placement agencies and management consultants. Levels were created in the organization and helped in establishing reporting relationship.
In the earlier period of her venture, she asked her employees to put in extra hours of work. In return, she promised to give them special incentive within one year. Her business was doing well and she honours her commitment by giving them bonus.
Amrita was a good leader. She develops plans and makes decisions in consultation with her subordinates. However, she was biased with her female employees when it comes to solving conflicts among her staff.
Amrita tried to motivate her employees by giving them bonus. To which category of incentives bonus belongs to?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Monetary incentives
Option (1) Non-monetary incentives — Incorrect. Non-monetary (non-financial) incentives give social and psychological satisfaction, such as status and recognition. A bonus is paid in money.
Option (2) Individual incentives — Incorrect. Individual incentives are rewards for one person’s own performance. The question asks what type of incentive a bonus is, and a bonus is a financial (monetary) incentive.
Option (3) Monetary incentives — Correct. A bonus is an incentive offered over and above the wages or salary. It is given in money, so it is a monetary (financial) incentive. Amrita gave a bonus to her employees.
Option (4) Group incentives — Incorrect. Group incentives are rewards for the combined performance of a team. The question asks what type of incentive a bonus is, and a bonus is a financial (monetary) incentive.
Note: The case study is taken from the chapter ‘Principles of Management’, but this question is based on the chapter ‘Directing’. However, since it is a case-study based question, all the questions on this case study are tagged to the chapter the case study is taken from. NCERT (2026-27 Edition): “Financial and Non-Financial Incentives … Financial incentives refer to incentives which are in direct monetary form or measurable in monetary term and serve to motivate people for better performance. These incentives may be provided on individual or group basis. …” “(iii) Bonus: Bonus is an incentive offered over and above the wages/ salary to the employees.” |