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Explain the meaning of incentives.

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Incentive:

  • Incentive means that which ‘incites’ or has a tendency ‘to incite action’.
  • In the terminology of commerce, the inspiration that the business units give their workers to maintain their work aptitude, continuously increase efficiency, maintain high quality standards, etc. is called incentives.
  • Incentives increase enthusiasm of workers.
  • Incentives inspire employees to achieve their objectives.

There are two types of incentives. They are:

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