The system of stimulation of work in modern conditions

Abstract

Object: is to develop scientifically based recommendations for improving the system of labor incentives in modern conditions based on a comprehensive analysis and evaluation of the system.

Methods: When writing the article, the following methods were used: methods of scientific analysis, synthesis, and structural analysis.

Findings: It is revealed that in modern conditions, the human resources potential of the modern economy is the most important strategic factor affecting the country's competitive advantages in the world. In the course of the study, the factors that influence the formation of the labor incentive system were classified. the main principles of building an effective motivation system in modern conditions are revealed, its types are considered, and modern theories of motivation are analyzed.

Conclusions: In the course of the study, the authors concluded that it is necessary to apply more flexible approaches to determining the level of the basic salary and the variable part of the salary, the need to link the salary with the final performance indicators of both the individual employee and the entire structural unit, as well as the enterprise as a whole.

A classification of factors that influence the formation of the labor incentive system is proposed, including two groups: external (objectively existing and independent of the company's management) and internal (formed and dependent on the company's management).

Introduction

Any stimulation of labor implies exchange. The employer hires employees in order to use their knowledge, skills, and experience in the production process of making material and spiritual goods. Employees are hired to the employer to obtain from him certain socially significant benefits. The exchange must be fair, equivalent. The stimulation of labor will be effective only with an equivalent exchange.

Higher needs have receded far into the background, and the behavior of most workers is controlled by lower needs (according to Maslow's hierarchy), which is both a consequence and a reason for the formation of a specific mentality of the modern worker. Stimulation of work of the domestic enterprises is directed on formation of such behavior of the worker, which allows the organization to achieve the purposes. The process of stimulation is to create a certain work situation that would affect the needs of the individual.

The purpose of the study is to develop scientifically based recommendations for improving the system of labor incentives in modern conditions based on a comprehensive analysis and evaluation of the system. The main methods used in this study are methods of scientific analysis and synthesis, structural and factor analysis.

For effective use of available methods of influence on employees, we classify incentives according to different criteria. Classification allows you to identify the mechanism of action of each stimulus.

According to what needs are met by incentives, they can be divided into tangible and intangible. Material incentives always contain elements of commodity-money relations and are monetary and non-monetary. Monetary incentives include salary, various bonuses, additional payments, allowances. Cash payments are made in accordance with the quantity and quality of labor invested by the employee in the organization. Non-monetary payments may be made in the form of in-kind remuneration, issuance of permits, official cars, provision of official housing, in other forms.

Once you have defined the objects of impact, proceed to the elucidation of the psychological aspects of motivation. At this stage, character traits, properties of individuals, their value orientations, attitudes, ideals, personality type are investigated When developing a labor-intensive system at the enterprise, the author considers the following requirements:

1. Complexity — when developing incentive systems, various types of incentives (tangible and intangible, group and individual, positive and negative) should be used, in view of the existing approaches at the enterprise and personnel management experience.
2. Differentiation is an individual approach to stimulating different groups of workers. As we have already noted, different incentives should be used towards qualified and unqualified, young and old, male and female employees, etc.
3. Flexibility is the need for continuous monitoring and adjustment of the incentive system depending on changes in employees' motivation affected by the value changes of the society as a whole and within the working team.
4. Promptness implies a quick response of management to reducing employees' motivation, and reducing the effectiveness of incentives. The main signals of inefficiency of the incentive system include: fatigability and irritability of employees; tardiness and absenteeism; overt or covert sabotage; conflicts with management and the team; reduced interest in work; reduced loyalty to the company; violation of performance discipline; low performance results; propensity to change jobs.

Hypotheses. Research on labor incentives in recent years has shown that it has undergone negative structural changes as a system.

In modern conditions, the personnel potential of the modern economy is the most important strategic factor affecting the competitive advantages of the country in the world.

Stimulation of labor activity involves the use of all various forms and methods of regulation of labor behavior.

The human resources potential of the modern economy is the most important strategic factor affecting the country's competitive advantages in the world.

Literature Review

Based on the goal-setting theory of E. Locke, the incentive system at the enterprise should include the goals of both the company's management and the individual employee (Bazarov, 2010)

Therefore, during its development, it is necessary to carefully study what motives determine the behavior of personnel, and what incentives the enterprise can provide to employees so that they can fulfill their needs and receive material or moral benefits.

Thus, the incentive system should:

• – make the employees to feel confident and secure, serve the goals of employee's satisfaction and improve the quality of work;
• – orient the employee to achieve the corporate objectives and the desired result;
• – combine the rigidity of the remuneration determination rules and flexibility in responding to changes in the external and internal situation in the organization;
• – serve not only as the motive of work, but as a control mean (lever) for managers. Within the incentive system, the manager should be able to both encourage and punish the employee.

The management of the enterprise should to carefully study the individual needs of the employee, therefore, his motives for labor activity. With the same individual approach, it is necessary to develop an incentive system. For one category of employees, a large salary can be a good incentive, for another category, it is an opportunity to distribute their working time on their own, for the third one — the prospect for advancement in this enterprise.

Most researchers — A.Ya.Kibanov, I.A. Batkayeva, Ye.A. Mitrofanova, M.V. Lovcheva, I.A. Essau- lova, A.P. Grachev, S.A. Shapiro — two types of incentives are usually distinguished: material and non-material.

In the works of the researchers listed, material incentives are considered as a set of material benefits provided to staff for the labor contribution made to the enterprise performance, and non-material incentives imply obtaining a set of benefits provided to the employee and not related to payments and substantial monetary costs of the enterprise. At the same time, material incentives are divided into monetary and non-monetary, and non-material incentives into moral, social and organizational.

1. A. Ashirov in his work “Labor: incentives – motives – motivation” (Ashirov, 2018) proposes the following classification of incentives:
2. By incentive direction:

а) positive incentive;

1. negative incentive.
2. By incentive resource base:

а) economic incentives;

1. administrative incentives;
2. social incentives.
3. By types of incentives:

а) material incentives;

1. material and social;
2. moral and psychological.
3. By way of providing a stimulating effect:
4. direct incentives;
5. mediate incentives;
6. leading incentives;
7. postponed incentives.

Let us consider this classification in more detail.

The first feature (incentive's orientation) is reflected in the content of the managerial impact, which can be either encouraging or blaming; i.e. cause a positive and negative reaction among the staff to whom the managerial impact is addressed.

The second feature (resource bases of incentives) is associated with the essence of the subject, through which it turns out to be a stimulating effect. In this regard, various kinds of resources involved in production and management serve as a source of incentive. They include:

• – economical;
• – administrative;
• – public.

It is obvious that the construction of the motivation and incentive system will be largely determined by the economic situation of the organization, the latter, in particular, will critical for the ratio of various resources involved in the incentive schemes used.

When it is impossible to use large-scale economic resources, you need to address to a greater degree to administrative resources, based on the rationing of employment behavior and, mainly, punishment for noncompliance with the established norms.

Community resources are expressed in various kinds of effects associated with joint activities, as well as in the mentality, manifested in labor and organizational behavior of staff.

The third feature (variety of incentives) reflects the specific representation of the incentive in management practice. Material, material and social, and moral and psychological incentives are widely used here. If with respect to the first and third types there are well-established ideas, then the second type — material and social incentives — needs to be clarified.

Material and social incentives are connected to currently received loans, insurance, participation in management and profits (entrepreneurship, pensions, etc.). It is easy to see that these incentives are associated with a certain material (financial) support, but at the same time they cannot be attributed to exclusively material incentives in the classical meaning of this concept, since they are not directly included in the salary and are not directly related to individual labor's performance.

Such incentives can be classified as social, because they are aimed directly at improving the quality of life and improving the working conditions of staff through participation in enterprises' activities. It can be carried out in special programs or in the creation of its own social funds.

Due to the fact that, on the one hand, this kind of incentives is based on the material (financial) base, and on the other hand it has a social orientation, it is proposed to distinguish them in a special type — material and social incentives. The analysis shows that at present this type is becoming more widespread and seems very promising.

The fourth feature (the way of providing a stimulating effect) is also insufficiently analyzed in special works. Basically it is not specially distinguished, although it takes on greater and greater importance in management practice. This feature is based on temporary differences and the nature of connections in the incentives. The authors of the article propose to classify incentives by their temporal characteristics:

• – direct;
• – mediate;
• – leading;
• – postponed.

Direct incentives are expressed in wages and all other forms of payment for individual labor, as well as in administrative and public incentives (e.g., gratitude, reprimand, etc.). In this case, labor performance or employee's action and the incentive should be connected. In other words, cause and effect are based on a direct sequence and direct relationship.

Mediate incentives are intended to change certain conditions and circumstances associated with labor or directly related to it, in order to influence individual and collective performance of labor. Such incentives include professional development, delegation of authority, improvement of the organizational structure, improvement of working conditions, improvement of the quality of work and rest schedules, etc. It is obvious that all these features do not directly affect the increase in individual productivity and therefore they can be called indirect incentives. In other words, it is impossible to estimate exactly to what extent they will affect the employee's motivation, but it is assumed that their humanitarian focus, as well as the improvement of personnel management, will lead to positive effects.

Leading and postponed incentives differ in their purely temporal characteristics. Leading incentives include various types of advances, credits, loans, etc. material incentives.

From administrative incentives — various kinds of career advancement, empowerment, granting of official privileges, from public incentives — approval and support received. All this anticipates the subsequent, individual labor performance. The value of leading incentives is recognized to be quite effective, although there are cases of the opposite order. The latter is most often associated with advances through salary.

Postponed incentives are most often represented in the material and social form of incentives. Especially in the pension systems. These incentives are widely spread due to the social orientation of the state, the involvement of companies in the implementation of social programs, and also as a result of an increase in social wealth and recognition of human resources as the main ones.

Methods

New approaches to incentives involve the abandonment of traditional time-based systems or payment by complexity coefficient, etc., as well as their replacement with remuneration consisting of two components: the base rate and additional incentive payments, depending on individual results and/or the performance of the unit/company.

Therefore, in this paper, we will look at these two most important components in more detail.

Results

Base wages is a monetary remuneration to an employee for his/her work in an organization or for performing duties at a given position (workplace) in accordance with the measure and quality of the labor invested. It consists of the official salary (usually monthly). At some enterprises, in addition to the official salary, the basic wages include a qualification allowance.

Official salary is a guaranteed monetary remuneration paid to an employee in accordance with an employment contract (or any internal regulatory document of the organization, which increases the remuneration specified in the employment contract) regardless of labor performance. It should be noted that in connection with this “regardless of labor performance,” in practice, the official salary in itself has not the highest incentive effect for the employee.

The employee's official salary is determined depending on a number of factors (Kibanov et al., 2013)

• – skill level;
• – complexity of work performed;
• – degree of independence of work performance;
• – degrees of responsibility for managing the work of other employees;
• – intensity, harmful exposure (including hazards) of labor;
• – cost of living in the region (city, settlement);
• – natural and climatic characteristics;
• – industry specifics.

In modern management there are the following approaches to determining the level of the base salary (Shapiro et al., 2012)

1. Ranking method. It assumes the division of all types of work usually based on the complexity of the work performed. There are the following methods for determining the complexity of work:

а) Ranking is a non-analytical method, since the work is assessed as a whole, based on the impression it makes.

1. Classification by complexity is a semi-analytical method, in which an impartial, but not exhaustive analysis of qualification requirements is carried out.
2. Itemized ranking is an analytical method that requires a very detailed study of qualification requirements. The definition of the salary level is basically preceded by an assessment of labor (work complexity).

The advantage of this salary adjustment method is simplicity and accessibility for any organization. The disadvantage is that this method can be used only in relatively small organizations with a narrow list of employees' positions. Besides, with this method, the subjectivity of assessing the complexity of the work is great.

1. Factor comparison method. More formalized quantitative method of labor assessment. It includes the definition of several compensable factors (for example, responsibility, independence, mental burden), each of which may have several degrees, as well as the degree to which each factor is present in a particular type of work. For example, types of work may have 5 degrees of responsibility. In addition, each degree of each factor is assigned a certain number of scores. After that, we determine the extent to which each of the compensated factors (for example, responsibility) is present in the work, summarize the corresponding scores for all factors and obtain the overall scoring of the work.
2. Job classification (or grading) method. Types of labor are divided into groups. These groups are called categories (classes) if they include only similar types of labor, or ranks, if they include types of labor that are similar in complexity but differ in other characteristics. This method also includes the most popular salary adjustment method using the rate ranking system. Development of a multi-rank rate scale is the most common form of remuneration in most countries of the world.
3. Grading method is grouping of positions for certain reasons (definition of “weight”, classification, etc.) in order to standardize remuneration in an organization. A way to determine the value (weight) of a particular position for the organization. Essentially, grading is a way of rating.

Grading objectives:

a) Comparison of positions by specified parameters and ranking of works by significance for the enterprise. In this case, the task of raising the prestige of a certain employee in an organization or horizontal promotion within a grade, that is, salary increase, can be solved. Besides, just the intersecting boundaries of the grades make it possible to make a so-called horizontal career: an employee can be moved to another grade (increased) without salary increase.

b) Rating (salary adjustment) based on the significance of work or a position for the enterprise. It allows you to pay not only the market value of the employee, but also the value of his/her work for the company. In addition, since grades combine positions of similar content and different hierarchical levels, this makes it possible to “tie” to different grades different levels of additional monetary and natural incentives: the difference in the volume and content of social packages, benefits for different categories of employees, etc.

1. Motivation is career motivation for employees, engagement motivation for candidates.

Basically, as sated above, grading is a type of work rating, but it also has fundamental differences, which are reflected in table 1 (Kibanova et.al., 2013).

Table 1. Difference between the grading system and the rating system

Continuation of Table 1

The specific sizes (levels) of official salaries are determined individually by each organization, and depend primarily on the market value of the job (position) and internal assessment of the work importance for the business, on the content, complexity and skill level required to perform a particular work.

Positions are evaluated by the evaluation committee using substitution profile tables, based on three groups of factors that are considered the most important.

The first group of factors include knowledge and skills required for work. There are three main elements: technical knowledge and skills, managerial and interpersonal qualities.

The second group of factors is issue resolution. It includes two main elements — the freedom of thinking and the complexity of the issues to be solved.

The third group is the level of responsibility. Includes: freedom of action, field of activity, the type of position's influence on the performance, as any system, the grade system has its advantages and disadvantages, by analyzing the sources (Malova, 2016)

The main types of premiums are:

1. Premium for individual employee performance. It reflects the possibility of direct individual influence of the employee on his/her performance. If this is not the case, then one of the incentive principles “Pay for real work, not for participation in the process” is violated. It is accrued by pre-determined bonus indicators, which are determined individually for each employee (position).
2. Premium for contribution to the work of the structural division. It is used to stimulate better interaction and mutual assistance between employees of the structural division to increase his/her performance as a whole. A bonus fund is calculated for each structural division of the organization. The bonus fund is distributed among employees of the structural division using the labor participation coefficient (LPC).

LPC determination procedure:

LPC is tied to the official position or qualifications of the employee;

1. scoring method (performance by predetermined indicators are taken into account (including their scoring) every day basically by the head of the structural division; the scores are summed up at the end of the month);
2. combination of the first two methods.
3. Premium for the overall performance of the organization. The main purpose is to motivate employees to increase the overall performance of the organization. It can be paid at different intervals (for example, quarterly, semi-annually, annually) and apply to various categories of personnel (for example, only to the owners of the organization and top managers; only to top- and middle-ranking managers; to top- and middle-ranking managers and employees of structural divisions, “bringing money” to the organization; for all permanent (fulltime) employees of the organization).

4. Target bonuses. It is used to stimulate effective work and activity of employees when performing individual targets. For example, for innovation, initiative shown, raw material and material saving, improving the quality of products (works, services), work experience in the organization, etc.

The bonus system organization procedure for personnel is regulated by a special “Provision on bonuses”. In addition, the provision on bonuses can be developed for a certain category (group) of personnel or extend to a specific structural division (group of divisions) of an organization.

The provisions on bonuses should include:

– indicators and specific conditions of bonuses;

– amount, scale and terms of bonuses;

– circle of awarded employees;

– source of bonuses.

Bonuses can be made by one or a group of agreed indicators. Experts identify four main groups of indicators of bonuses, stimulating employees for individual performance. They include:

1. Quantitative indicators: fulfillment and over-fulfillment of production targets for output and nomenclature, percentage of performance standards, ensuring uninterrupted and smooth operation of equipment, compliance with or shortening the planned repair time, performance of a smaller number compared to the standard, reduction in labor intensity of products, etc.
2. Quality indicators: improving the quality of products, the percentage of delivery of products from the first presentation, reducing the defect rate, increasing the grade of products.
3. Saving of resources used: economical consumption of raw materials and materials, fuel and electricity saving, reducing the cost of maintenance and repair of equipment.
4. Rational use of technology: compliance with the terms of development of new equipment and advanced technology, adherence to technological discipline, increasing equipment load factor.

For managers, professionals and employees, bonuses are primarily related to profit. There are proposals on the need to include in the bonus system for heads of organizations such indicators as the fulfillment of contractual obligations, the growth in production, and the provision of output of modern technological level and quality.

The condition for bonuses is usually the work during the accounting period and the fulfillment of the established indicators. One of the most important conditions for the bonuses is the compliance with labor discipline. Employees who have fulfilled bonus indicators, but have committed absenteeism or have appeared at work under the influence of intoxicants, have committed a different disciplinary offense (for example, violating the process rules for manufacturing products), do not accrue a right for the bonus in full. As a rule, they are either not rewarded (in the event of a serious misconduct), or they are paid a premium in a smaller amount than employees who have fulfilled both the indicators and the conditions for bonuses. An employee who has not fulfilled the bonus conditions does not acquire the right to a bonus or does not acquire the right to a bonus in the established (basic) amount.

Speaking about the bonus system, we should not forget about such an important point as bonus reduction. Bonus reduction is a procedure for reducing the amount of an already earned premium.

The purpose of bonus reduction is to increase the labor, production and process discipline of employees. Sanctions for violation of labor discipline can be contained either in the Regulation on bonuses, in the form of an independent section “Bonus Reduction Procedure”, or regulated by an independent document (for example, the “Regulation on the defect-free labor system”). Depending on the severity of the violation, the amount of bonus reduction can be set from 15 % to 100 %.

Traditionally, within the economic sciences, which mainly develop this problem, incentives are divided into material and moral ones. Such a separation of incentives, in our opinion, does not look quite correct. More precisely, the whole set of applied incentives could be divided into economic associated with material incentives for labor and non-economic associated with organizational, status and moral incentives (Oganesyanet al., 2012). A non-economic labor incentive system is shown in Figure 2. Let us consider each element of the proposed scheme in more detail.

Organizational incentives of labor activity is a tool of organizational management that includes a system of interrelated incentives that regulate employee behavior by increasing his/her job satisfaction in the organization and encouraging employees to creatively perform their functions aimed at implementation of the organization's strategic goals (Artyuhova et al., 2015). We allocate four elements to organizational incentives methods:

1. Corporate culture is a corporate-wide value system that allows an employee to feel involved in an important (reference) group of people, to receive recognition of his/her own professionalism from it. According to Maslow — these tools help to fulfill the needs for acceptance and respect.

The tools of corporate culture include the following:

– organizational management structure;

– leadership style;

– clarity of function allocation;

– decision making mechanism;

– work standards;

– performance evaluation;

– internal and external communications;

– corporate style;

– corporate traditions and holidays;

– scientifically based selection, training and periodic certification of executives;

– recruitment of primary divisions, taking into account the psychological compatibility factor;

– applying social and psychological methods that contribute team members to develop the skills of effective mutual understanding and interaction;

– ways to resolve conflicts, etc.

2. Labor conditions are a complex objective social phenomenon that is formed in the labor process under the influence of interrelated factors of a social and economic, technical, organizational and natural occurrence and affecting human health, performance, his attitude to work and the degree of job satisfaction, and labor productivity and other economic performance, on living standards and the all-round personal development as the main production forces of society (Buhalkov, 2016).

According to Maslow's theory of motivation (Agafonova et al., 2017), the tools of this group primarily satisfy physiological needs.

This group of tools includes everything that anyhow provides employees with comfortable work:

– work place;

– sanitary and hygienic conditions (temperature, light, the content of harmful substances in the air, wind speed, dust, humidity, etc;

– workplace equipment;

– provision of workwear and safety footwear;

– transportation services;

– provision of mobile communications;

– catering;

– medical service;

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– sports, etc.

3. Flexible modes of operation. The necessary elements of the flexible working hours basically are (Lobanova, 2015) variable (flexible) hours at the beginning and end of the working day (shift), within which the employee has the right to start and finish work at his discretion; fixed hours — the hours required to stay at work for all employees in accordance with the flexible working hours. Thus, the working day in the application of flexible working hours is conditionally divided into 3 parts: two flexible time intervals — at the beginning and end of the working day and a fixed interval between them, divided, in turn, also into two parts by a lunch break.

The authors of the article identified two main options for a flexible working time system:

• – with the obligatory observance by employees of the fixed working hours. With this option, employees who come to work later must work out the due time on the same day;
• – with the obligatory observance of the weekly or monthly fund of working hours. In this case, employees can transfer the difference between the hours worked and the hours required from one day to another or from one week to another during the same month.
• With help of the working schedule, some social problems can be solved, in particular:
• – reduced labor market strains (for example, the spread of flexible working hours for working women by organizations will allow them to successfully combine motherhood and career, thereby stimulating birthrate);
• – chronic fatigue, lack of sleep and stressful situations were eliminated (for example, when developing and implementing advanced labor management techniques ensuring adequate rest for workers and employees who perform work duties in shift working hours, as well as in irregular working hours), etc.

The disadvantages of using this working hours are:

• – not suitable for all employees, because it requires a great concentration, responsibility and self-control for an employee;
• – such work creates some isolation of people, since working relationships play an important role in the social relations of society;
• – with the mixed working hours (some employees work according to a flexible schedule, and the rest — according to standard conditions), envy and ill will to each other may arise;
• – additional costs from employers for the introduction of additional control and accounting of working time and labor remuneration to such employees;
• – a negative impact on the career growth of employees performing their duties in the flexible working hours.

4. Participation in organization management. Knowing the labor motivation structure of employees, it is possible to more accurately predict which forms of incentives will be most effective for one or another category of staff of the organization. One of the most promising forms of employees' group behavior, leading to an increase in the performance of the collective work and the achievement of its goals, is participative management, which is also one of the employee incentives methods

The International Institute for Labor Studies describes participative management as a process in which employees and other categories of personnel have the right to make management decisions within an enterprise, with the elements of participative management being considered as a condition for a full implementation of employees' labor potential within the concept of quality of working life (Potudanskaya et al., 2016)

Participative management can also be viewed as remuneration programs seeking to increase internal motivation and interest of employees in the labor process by expanding their authority in the activities of the company. Unlike most remuneration systems based on the individual contribution of employees, the participative management is based on the recognition of the mutual interests of all members of the firm, which helps to integrate these interests and increase the interest of employees in performance.

Thus, the participative management structure provides for more active participation of employees in decision making, primarily within their area of responsibility, increases employee motivation, increasing responsibility for their performance, reduces the possibility of labor conflicts, eliminating many organizational and managerial reasons (Surkova, 2017).

Status labor incentives is focused on professional growth, increasing the authority in the team. These are promises to the employee of more interesting (profitable) work, increasing his/her social value in his/her own eyes or the eyes of those around him/her, which actually influence the change of status, and hence, the receipt of additional material benefits. The influence of these incentives is most noticeable not at the time of presentation of another job, position, but at the stage of waiting, when a person mobilizes his/her internal reserves in order to get what he/she wants, to move to these new positions (jobs, posts). This group includes everything that gives company employees the opportunity for career growth, develop, achieve significant goals for themselves. According to Maslow — these tools contribute to the fulfillment of the need for self-fulfillment:

• – professional development;
• – career development;
• – possibility to make decisions;
• – internship and training;
• – innovation incentives.

Moral stimulation of labor activity is aimed at regulating the employee's behavior on the basis of objects and phenomena reflecting public recognition, increasing the employee's prestige.

Incentives of this kind triggers motivation, based on the fulfillment of the need to express appreciation and be recognized. The essence of regulation is the transfer and dissemination of information about the labor performance, achievements in it and the merits of the employee to the team or organization as a whole.

Instruments of moral incentives for staff (Pritvorova et al., 2018).

– systematical informing the staff about the state of affairs in the organization (extended meetings, meetings of the work team, presentations of successful projects, organized internal PR, targeted ideological work, local corporate media, corporate identity, etc.;

– organization of corporate events (professional competitions, master classes, labor competitions, corporate events, newsworthy events, team building events, etc.);

– official recognition of merit (presentation to state, professional and public awards, awarding honored employees with certificates, diplomas, corporate awards, valuable gifts, vouchers, sums of money (status premiums), mentioning at meetings, public events, honor roll), etc.).

Discussions

Thus, it should be noted that the path to effective personnel management lies through an understanding of its motivation. Only by knowing what drives a person, what motivates him to act, what motives lie at the basis of his behavior, an effective system of forms and methods for work collective management can be developed. To do this, you need to know how certain motives arise, how and by what kind of incentives, these motives can be brought into action. In organizations where people closely interact with each other, the use of incentives should take into account the needs and their satisfaction, the entrepreneurial spirit and interests of the individual, and even the character and way of life. Then the incentives will be truly effective and personally meaningful. This article highlights the principles of labor motivation, as well as the conditions under which the labor motivation is formed or not formed. It was noted that changes in the socio-economic conditions of the economy have a multi-sided, often contradictory effect not only on the nature and performance of work, but also on its motivation. On the basis of the works of P. Drucker and A.N. Vashchenko, global modern trends of changing labor motives and their transformation in the conditions of our country are revealed.

Conclusions

– In this article, a classification of factors influencing the formation of the labor incentive system was proposed, which includes two groups: external (objectively existing and independent of the company's management) and internal (formed and dependent on the enterprise management); and the influence of these factors in the conditions of the Republic of Kazakhstan was considered.

– The main building principles of effective incentive system were also revealed in this studyits types were also considered — economic and non-economic. The conclusion is made about the need to apply more flexible approaches to determining the level of base wages, and the variable part of wages, the need to link wages with the ultimate performance of both an individual employee and the entire structural division, and the enterprise as a whole.

– Modern motivation theories were analyzed from the point of view of their impact on the efficiency of the use of labor resources, as well as from the point of view of their use as a basis for the analysis of foreign incentive systems for employees.

– It follows from the literature analysis that non-economic incentives play an increasing role in labor incentives for employees, as it allows to satisfy not only their basic needs, but also the needs of higher levels and create a favorable atmosphere in the workforce. This is achieved by expanding the participation of employees in enterprise management, using flexible working hours, creating a corporate-wide value system that allows an employee to feel involved in an important group of people, to receive from recognition of his/her own professionalism from it.

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