Proverbs 16:26 states, “The appetite of laborers works for them; their hunger drives them on” (NIV). This verse lends to the desire and strength to not only work, but the desire to also be steadfast and diligent in said work. “Incentives are rewards and penalties that motivate behavior” (Cowen and Tabarrock, 2015, p.1). Incentives are critical because they impact behavior. For example, ratings (jobs) that are critically undermanned in the Navy provide monetary incentives to eligible personnel in exchange for continuation of service. Depending on the job and how undermanned the position is determines the amount of the bonus. Some rates are eligible for hundreds of thousands of dollars because the need for their technical expertise is great. On the reverse side, there are ratings that are over-manned and advancement opportunities are slim. Sailors elect to either cross rate (choose another rating) or separate from service. While the latter is not necessarily a penalty, the lack of incentive motivates behavior. In the Economic Development Review, Mackay wrote an article detailing the findings of a study conducted regarding economic incentives. The study concluded that fifty-eight percent of those surveyed felt their incentive offerings were comparable to their competitors and seventeen percent felt they were more successful than their competition because of their incentives. This lends to the importance of incentives in business establishments and how they not only impact the individual business but also their competitors.
References
Cowen, T., & Tabarrock, A. (2015). Modern Principles of Economics. New York, NY:
Worth , U.S.
Mackay, J. W. (1994). The evolving importance of incentives. Economic Development Review, 12(4), 4. Retrieved from http://eres.regent.edu:2048/login?url=https://searchproquest-com.ezproxy.regent.edu/docview/230085202?accountid=13479