Group Incentives

2570 Words Dec 21st, 2005 11 Pages

Sometimes managers need to decide what kind of remuneration they have to use in order to motivate their subordinates to work harder, smarter or faster. As in my case I'm willing to work faster or harder if I know there is something I can gain with my behaviour and these thoughts almost everyone has. As their decision should be wise and fact based they need to know how the incentives they will use influence the motivation of the employees and when to use them. Mangers can decide whether to use individual or group incentives. If the individual incentive plans can't be implemented the group incentive plans take their place and vice versa. In this paper I would like to focus on group incentives and try to explain how the group
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Gainsharing could be also considered as win-win situation because employees as well as companies are profiting from this incentive plan. Employees in bonus pay and companies in reduced costs or better performance. The original and best-know gainsharing plan is the Scanlon plan. Other gainsharing plans include Improshare and the Rucker Plan. There are of course plenty of other gainsharing plans, mostly tailored to the special needs the organisation or company has. Some need to cut costs, others need improvement elsewhere, and not every organisation has the same needs.

Gainsharing and motivation

If gainsharing as an incentive plan weren't employee motivating it wouldn't be implemented or used by managers. But this motivation effect needs to be supported by some evidence or have the fundamentals in the theories of motivation. Let's have a look at gainsharing in terms of motivation theories we know or we can apply on this group incentive plan. The best applicable motivation theory is the expectancy theory. At first we need to know what is this theory saying in general. It is the theory that an employee motivation increases when he values a particular outcome highly and when he feels a reasonably good chance of achieving the desired goal. All of these can lead to higher employee motivation only under certain conditions. Important rewards must be perceived to be tied in a timely fashion to effective performance. In short, organisations get the
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