Question:
The question mark in the picture given below represents a financial incentive. Identify the incentive :
The question mark in the picture given below represents a financial incentive. Identify the incentive :
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Perquisites are often used to attract and retain high-level managerial talent.
They increase the 'real income' of an employee without necessarily increasing the taxable basic pay.
Look for benefits like "rent-free accommodation" or "conveyance allowance" to identify perquisites.
Updated On: Jul 18, 2026
- Pay and allowances
- Retirement benefits
- Productivity linked wage incentives
- Perquisites
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The Correct Option is D
Solution and Explanation
Concept:
• Financial Incentives: These are incentives that can be measured in terms of money and serve as a direct motivation for employees.
• Perquisites (Perks): These are additional benefits provided by an employer to an employee over and above their basic salary and allowances. Examples include company-provided housing, car allowance, medical aid, and free education for children.
Step 1: Analyze the components shown in the diagram
The diagram lists several specific benefits:
• Company-provided Housing.
• Car Allowance.
• Medical Aid / Medical Benefits.
• Education to Children.
Step 2: Determine the collective term for these benefits
While "Pay and allowances" (A) refers to the basic cash components (like Basic Pay and Dearness Allowance), the items listed in the diagram are non-monetary or fringe benefits that carry a monetary value for the employee. In management terminology, these are collectively called "Perquisites."
Step 3: Verify against other options
Retirement benefits (B) would include PF or Gratuity. Productivity linked incentives (C) would be a bonus based on output. Neither fits the description of housing or medical aid.
• Financial Incentives: These are incentives that can be measured in terms of money and serve as a direct motivation for employees.
• Perquisites (Perks): These are additional benefits provided by an employer to an employee over and above their basic salary and allowances. Examples include company-provided housing, car allowance, medical aid, and free education for children.
Step 1: Analyze the components shown in the diagram
The diagram lists several specific benefits:
• Company-provided Housing.
• Car Allowance.
• Medical Aid / Medical Benefits.
• Education to Children.
Step 2: Determine the collective term for these benefits
While "Pay and allowances" (A) refers to the basic cash components (like Basic Pay and Dearness Allowance), the items listed in the diagram are non-monetary or fringe benefits that carry a monetary value for the employee. In management terminology, these are collectively called "Perquisites."
Step 3: Verify against other options
Retirement benefits (B) would include PF or Gratuity. Productivity linked incentives (C) would be a bonus based on output. Neither fits the description of housing or medical aid.
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