Group Incentives

“Incentives are the cornerstone of modern life”(Levitt and Dubner 12). Levitt and Dubner once mentioned in their book “Freakonomics”. According to Oxford dictionary, incentives are something tends to incite to action or greater effort, as a reward offered for increased productivity (“incentives”). In business field, incentives are something given by bosses to encourage their employees to endeavour in bringing benefits to their business. For a simple example, the employee who hits the monthly or year sales target will get cash or prizes as incentives. Apparently, these incentives are something that motivates employees maintains their great performance and also to motivate other employee, whoever wants to get the incentives, work harder.

Quality of employees work is very critical for company’s success. If planned properly, incentive pay plans may increase employee’s interest in providing better service. This paper discusses

Management could abolish the Scanlon Plan and advocate an individually based incentive plan. Workers would earn bonuses according to their personal performances. This would be a great extrinsic motivator for employees but this would lower the intrinsic value. Additionally, the free rider problem and equity theory could be solved. However this plan does not reward teamwork and this would cause conflict between

The problem with most financial incentive plans is that they become an expectation, which means they are no longer motivating better performance but merely maintaining the status quo. Staff may come to view the additional cash as part of their normal compensation. They may even start depending on it. After the plan expires, morale (and results) can suffer as staff perceive that you took something away from them.

Overall, all of the incentive benefits can give employees the extra boost they need to make it through the day at work and home. These benefits have the potential to increase the value of every employee in the company and lessen the turnover rate.

The first advantage of a total rewards approach is self fulfillment so that people are recognized for what they do and encouraged to reach their potential through effective learning and development processes and given feedback on their performance. The second advantage is an organization culture where roles are clear and organizational and personal values are in alignment so that employees engage and enjoy work. Another way to consider the necessary components of rewarding people is to view them as individuals, within their team, in the organization and generally in the workplace. The fourth advantage is recognition, you must make sure that the employees

The team-based incentive pay plan financially compensates employees for the goals they meet as a collective group, rather than as individuals (). Employers who use the team-based incentive pay plan find that the approach brings a sense of urgency to the group effort. The team-based incentive results in greater performance and goal reaching than when individuals work on their own. Individuals who work under the pay plan are also able to gain a greater sense of cohesiveness. In the team-based incentive pay plan if you do not perform well, you would not receive a pay check. The people in the team-based incentive plan all recognize that the greater performance they have together the greater the payday would be for each member of the team.

Employees get bonuses based on incentive compensation of how productive they work. To begin, “the 2011 Incentive Plan is designed to further and promote the interests of the Company, its subsidiaries and its shareholders by enabling

Organisations place rewards policies within the organisation for many reasons. Reward systems through performance management allow organisations to improve staff retention by keeping them motivated. In addition, reward packages encourage high performers to excel within their expertise. This overall gives the organisation a positive image as the staff turnover will be low and give the sense that the company looks after their employees.

Absolutely perfect, the intrinsic rewards have to be working together; in general, that is exactly what a team is all about, without team the dream cannot work and all intrinsic rewards are relevant to the overall success of a company, which is contributed by leaders and subordinates working collectively as a unit. Well said Milagros.

Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.

Incentive based compensation plans are one of the most conversed topics organizations that have been dealing with for quite some time. There have been several philosophies, formulas, and plans used but in the end, each type of plan has created unfavorable and optimistic results. The questions have always been whether the positive that comes from incentives plans are worth the challenges they create. In examining some of the plans that offer individuals, team based, and long-term incentives, they all vary in different ways that they are applicable, administered and designed, and beneficial to the organization’s objectives.

Equity-based rewards is effective in various ways. Employers who do hold stock, will gain a greater connection with the company versus just being a shared owner. With time, this may give employees authority to acquire control, once working for a company for a long period of time. When this option is applied, employees eventually gain the right to regulate this type of compensation. A, even greater reward for the company, is that it reinforces their decision to stay with the company long-term. Although, employers may use this reward tactic to attract and retain key players, however, when there is not much talent to choose from, it can also provide concrete commitment. Differed from equity based reward system, some employers may use a more creative approach when designing a benefit package.

Additionally, they work harder to reach the goals set by the organization in order to achieve the reward. Rewards based on performance are profitable for both the individual employee and organization.

Today, competition between the businesses is extremely high thus companies need to find ways to be competitive. Organizations prepare the best market strategy to increase the company performance and the ways to keep their employee motivation on the highest level to perform well within the competition. At that time, several incentive pay programs play an important role for every organization to perform well within the competition.