What Are Economic Incentives?
Economic incentives are what motivates you to behave in a certain way, while preferences are your needs, wants and desires. Economic incentives provide you the motivation to pursue your preferences.
Economic incentives include cash rewards, bonuses, income and profits
Let's look at a basic example. Let's say you want wealth. You are motivated to work because you will be paid, which will help you achieve your preference for accumulating wealth.
Of course, economic disincentives discourage behavior. Taxes are a prime example of disincentives because they make products and services more expensive.
Extrinsic Incentives and Intrinsic Incentives
Extrinsic incentives come from outside of a person. These are the typical economic incentives that you probably think about all of the time. Extrinsic incentives include cash rewards, bonuses, income and profits. However, it's not all about money. External incentives can include such things as peer recognition, fame, social status and power. Some of these incentives will work better than others, depending upon your preferences. Someone may care more about social status, for example, than money.
Intrinsic incentives are psychological incentives and are internal to the person. Getting satisfaction from work is an intrinsic incentive. The feeling of making a difference in the world is also an intrinsic motivation - regardless of whether you actually make a difference or not. Sometimes extrinsic motivations will trump intrinsic motivations. For example, the idea of building a home for the poor makes you feel good, but you will gladly accept pay to do it, which ends your spirit of volunteering.
Keep in mind that extrinsic and intrinsic incentives are not mutually exclusive. They can work together. For example, you may not care much about money, but you do tend to enjoy power. You also want to change the world. These two incentives motivate you to pursue a political career - for the power and to do good.
Non economic incentives (challenges, recognition, etc.) Vinh Trieu
Non-economic Incentives
The purpose of non-economic incentives is to reward associates for excellent job performance through opportunities. Non-economic incentives include flexible work hours, training, pleasant work environment, and sabbaticals.
Research suggests that desired monetary incentives differ for associates based on career stage and generation. Surveys by the American Association of Retired Persons (AARP) have shown that most workers will work past retirement age if offered flexible schedules, part-time hours, and temporary employment (Nelson, 1999).
The generations covered in the AARP surveys include “Mature Workers” (those born between 1930 and 1945), “Baby Boomers” (those born between 1946 and 1963), “Generation X'ers” (those born between 1964 and 1981), and “Generation Y'ers” (those born after 1982). The information presented in Table 1 lists non-monetary incentives that are important to each generation covered in the surveys (Nelson, 1999).
Mature Workers Baby Boomers Generation X'ers Generation Y'ers
Flexible schedules Retirement planning Flexible work schedules Flexible work schedules
Part-time hours Flexible retirement options Professional development Professional development
Temporary hours Job training Feedback Feedback
Sabbaticals Tangible rewards Tangible rewards
Work environment Work environment
Attentive employers
Source: http://www2.inc.com/search/16431.html (Nelson, 1999).












Employee Benefits
Female workers are entitled to four to six months of maternity leave a year depending on the nature of their work. Those with babies under 12 months of age are also entitled to an extra hour off each day for nursing.
Employers must pay 2% of an employee’s salary or wages to an authorized health insurance company for health insurance benefits, and the employee must pay 1% for the same.
Both Vietnamese and foreign invested enterprises must pay an amount equal to 15% of the wages and salaries of its Vietnamese employees to the social insurance fund.
Of this amount, 10% is paid to the local labor office for employment benefits and the other 5% is paid to a social insurance fund established by the enterprise and jointly administered by the representatives of the enterprise.
This fund is used to pay employee benefits related to sickness, work-related accidents, and occupational diseases as well as for maternity leave and benefits, child care and funeral expenses of workers who die during their term of employment at the enterprise.

Foreign workers are exempt from payment to the social insurance fund.
Employers are responsible for withholding 5% of each employee’s salary and paying such amount on their behalf to the local social insurance fund. This fund is used for 1) old age benefits, 2) benefits for those who are permanently disabled through work-related accidents or sickness, and 3) burial expenses related to the first two