What kind of an incentive structure might an organization be able to implement that will get people on the “right page” with respect to embracing risk management principles?
Incentives are additional monetary benefits or perks which is given to employees on their contribution and commitment. Some incentives are common to all employees like festival allowances and some are unique based on the performance.
Risk managemen principles includes organisational risk related to business activities and risk associated with natural disasters and other calamities, economical flutuation, employee accidents etc. Thus incentives to get aligned with the risk principles need a detailed evaluation and strategic movements.Incentives should be plan based on companys revenue, budget and future growth, economic situations and industry conditions.Asssesment of performance and risk is very important to monitor the performance and return onn asset evaluation. This helps in identifying the leakage of cash through non value added incentives. For riks in accidents and other calamities proper insurance coverage plans need to be adopted to mitigate the huge expenses. Proper monitoring and backtracking evaluation on incentive structure makes the incentive program better aligned to companys objective and employee benefit.