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    which statement best describes incentives? incentives are mostly positive. incentives are mostly negative. incentives can be positive or negative. incentives are neither positive nor negative.


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    Which statement best describes incentives? Incentives are mostly positive. Incentives are mostly

    Which statement best describes incentives? Incentives are mostly positive. Incentives are mostly negative. Incentives can be positive or negative. - 15103242

    03/10/2020 Business High School

    answered • expert verified

    Which statement best describes incentives? Incentives are mostly positive. Incentives are mostly negative. Incentives can be positive or negative. Incentives are neither positive nor negative.

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    The statement which best describes incentives is:

    C. Incentives can be positive or negative

    According to the given question, we are asked to show the statement which best describes incentives and how this can be used to motivate or spur a person into doing something.

    As a result of this, we can see tha

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    For other uses, see Incentive (disambiguation).

    A florist offers a "buy one, get one free" incentive to encourage purchase of a certain flower.

    In general, incentives are anything that persuade a person to alter their behaviour.[1] It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of effort and therefore, higher levels of performance.[2]


    1 Divisions 2 Classification

    3 Monetary incentives

    4 Non-monetary incentives

    5 Incentives in economic context

    5.1 Potential issues

    6 See also 7 References


    Incentives can be broken down into two categories; intrinsic incentives and extrinsic incentives.[3] The motivation of people's behaviour comes from within. In activities, they are often motivated by the task itself or the internal reward rather than the external reward. There are many internal rewards, for example, participating in activities can satisfy people's sense of achievement and bring them positive emotions. An intrinsic incentive is when a person is motivated to act in a certain way for their own personal satisfaction.[4] This means that when a person is intrinsically incentivised, they perform a certain task to please themselves and are not seeking any external reward, nor facing any external pressure to perform the task.[5] On the other hand, an extrinsic incentive is when a person has external pressure persuading them to act in a particular way.[6] The external pressure could include either a reward for completing the task or could be a form of punishment or consequence if the task is not completed.[7] When people have difficulty completing a task or lack interest in participating in an activity, extrinsic incentives can often be effective in helping people improve their motivation.

    Intrinsic incentives and extrinsic incentives are both important and drive people's behaviour. However, people's intrinsic motivation tends to decrease when they are offered too many extrinsic rewards, in order to maintain the action, constant incentives have to be provided, which is known as the Overjustification Effect.

    In the context of economics, incentives are most studied in the area of personnel economics where economic analysts, such as those tho take part in human resources management practices, focus on how firms make employees more motivated, through pay and career concerns, compensation and performance evaluation, to motivate employees and best achieve the firms desired performance outcomes.[8]

    Overall, the standard "law of behaviour" suggests that more incentives will result in higher performance and higher effort,[9] people can reach their performance to the next level by rewarding. As a result, extrinsic incentives are commonly used within the workforce by employers and managers.[10] This is because, employers believe that the more they encourage their employees to act in a certain way, the more the company will benefit in reaching its organisational goals.[11] However, there are some parties who opposed the benefits of using extrinsic incentives and believe they cause more harm than good. This is because these opponents believe that the constant use of extrinsic incentives can lead to crowding out of intrinsic incentives, which are also valuable performance motivators.[12] When people are constantly being incentivised by external pressures, they neglect their intrinsic motives which could consequently ruin their work ethic.[13] This is because, these people can become too comfortable with always gaining some reward for acting in a certain way, people think that they deserve to earn rewards for doing certain things, not for the benefits of the firm but benefits of themselves, leading to them to take no action if no extrinsic incentive is involved.[14] Nonetheless, incentives (both intrinsic and extrinsic) can be beneficial in altering a persons behaviour and can be effectively used and executed within many different areas of life including in the workforce, in education and within one's personal life.[15]


    Classified by David Callahan, the types of incentives can be further broken down into three broad classes according to the different ways in which they motivate agents to take a particular course of actions:[16][17]

    Class Definition

    Remunerative incentives Exist where an agent can expect some form of a material reward like money in exchange for acting in a particular way.[17]

    Financial incentives

    Moral incentives Exist where a particular choice is widely regarded as the right thing to do or is particularly admirable among others.[17] An agent acting on a moral incentive can expect a sense of positive self-esteem, and praise or admiration from their community. However, an agent acting against a moral incentive can expect a sense of guilt, condemnation or even ostracism from the community.[17]

    Source : en.wikipedia.org

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