To improve employees’ sense of responsibility and enthusiasm, it is necessary to do so through incentives, as the development of an enterprise would be impossible without their support. A manager should understand that an employee is not just a tool and that their initiative, enthusiasm, and creativity will be pivotal to the survival and prosperity of the enterprise. To gain their support, it is necessary to provide them with incentives, while stimulating their enthusiasm is the main function of management and incentives. Building an effective incentive mechanism is an important approach to improving their enthusiasm and initiative.

An effective incentive mechanism calls for design and implementation. The design of this mechanism mainly involves: the design of the reward rules; the design of a series of positions; the design of the employee training and development scheme; the design of other incentives, including employee participation and communications. When the design is complete, the mechanism needs to be implemented to check for its effectiveness.

An effective incentive mechanism includes various incentive methods and measures, which can be summarized as follows:

1) Compensation

2) Rules

The operations of an enterprise need the support of various rules. Likewise, we need to work out a reasonable set of rules for employee incentives in order to improve their enthusiasm and initiative effectively.

Reward and punishment rules: Praises and rewards are the cornerstone for inspiring the employees to bring out their best. As there is a close correlation between high performance and incentives, rewards can encourage the employees to achieve high performance; while their high performance is duly rewarded, the two in fact complement each other in a mutually beneficiary way. On the other hand, punishment is required to discourage certain conducts – and it may be called a “minus incentive”.

Competitive mechanism: Competition is a magic weapon for stimulating the enthusiasm in the employees, while it allows the qualified persons to move up to higher positions on the corporate ladder and the under-qualified persons to step down from their current positions. The elimination mechanism is a specific form of the competitive mechanism. As far as the business management levels in China are concerned, the elimination mechanism is feasible. Building a strict competitive mechanism and implementing an elimination mechanism aims to put pressure on the employees and make them competitive; it is an effective way of stimulating the employees, invigorating the company, and better driving its growth. 

Job position-based rules: This is to build appropriate job positions and make them more challenging. The “challenge of a job position” means that every employee truly feels the slight pressure from his/her position. How should we make a job position challenging? To answer this we need to take the following considerations: One is to set a good job position, and the other is to match the right candidate with this position.

Target-based incentive: This means that we need to set an appropriate target to stimulate the motivation and action and therefore the enthusiasm of a person. As a stimulant, a target has the function of motivating, guiding, and encouraging. Only by motivating a person to pursue a higher target, can we stimulate his/her internal power driving him forward. In fact, in addition to the financial target, a person aspires to such targets as power and accomplishment. A manager needs to tap into this elusive target hidden in every person and help him/her to make a detailed implementation procedure. In the subsequent work, the manager should guide and help him/her to reach his/her target by working hard through self-motivation.

3) Emotional incentives

Respect-based incentive: The so-called respect-based incentive requires that an enterprise manager should respect the value and positions of the employees. If he/she does not care about the feelings of the employees or respect them, the manager will hurt their enthusiasm, making them realize that they work only to get paid and thus weakening the incentive effect. In other words, respect is a catalyst to the explosive increase of confidence in the employees and respect-based incentive is a basic form of incentive. The mutual respect between superior and subordinate is so powerful that it helps to promote a harmony between employees and form a teamwork spirit and unity in the enterprise. Therefore, respect-based incentive is an important means to improve the enthusiasm of the employees.

Participation-based incentive: The practice in and research on human resources management indicate that modern employees all have the need and hope to participate in management and that creating and providing as many opportunities as possible for them to participate in management is an effective means to stimulate their enthusiasm. Such participation helps them to develop a sense of belonging to and identifying with the enterprise, further meeting their needs for self-respect and self-actualization.

Work-based incentive: Work itself has the power of incentive! To give full play to their enthusiasm in work, we need to consider how to make work itself more meaningful and challenging so as to bring the employees a sense of self-actualization. This requires the manager to design work for the employees in such a way as to enrich and enlarge work content. How should we enrich work content? – for this Western scholars provide five criteria, i.e. the employees should have the following five feelings: First, they feel that their work is important and meaningful; second, they feel that their superiors have been valuing them; third, they feel that their job positions can best give full play to their intellectual potential; fourth, they feel that they receive feedback for everything they have done; fifth, they feel the entirety of their work results.

Training and development opportunity as incentive: With the knowledge economy here and now, today’s world is more and more dependent on information, digitalization, and the Internet, where knowledge updates are picking up the pace and the knowledge structure of the employees is increasingly unreasonable and outdated. We need , through training, to update their knowledge, provide them with the opportunity of further development, and meet their needs of self-actualization.

Honors and promotions as incentive: An honor is a high praise of an individual or a group of individuals by people and an organization. It is an important means to meet human needs for self-respect and encourage people to strive and succeed. From the perspective of personal motivation, everyone is in need of self-affirmation, glory, and honor. We should honor those exemplary employees with outstanding performance – this is a very good means of “spiritual incentive”. It costs close to nothing and it is effective.

4) Building excellent corporate culture

During its development, an enterprise should, by building shared values and ethical values and improving human resources management, consciously unify the thinking of its employees and make them work toward the same goal during the development of the enterprise. To build excellent corporate culture, an enterprise should be “people-centered” and respect the value and positions of its employees; it should develop in its employees a sense of responsibility as “owners” of the company.