Incentive Pay For Job Performance

1576 WordsApr 29, 20177 Pages
Incentive pay is an important concept that allows an employee to be rewarded based on exceptional job performance. This is used to motivate employees into working both quickly and efficiently. In order to effectively utilize incentive pay, one must balance out payments between individual performances, group performances, and organizational performances. One example of individual incentive is an individual bonus. An individual bonus occurs when an employee meets the criteria of their company to bring in a certain amount of customers (Noe 402). This will lead to payment based on how many customers were brought in. For instance, if an employee were advertising and brought in 100 customers, they will receive a higher bonus compared to someone…show more content…
So if you produce 10 items at $1 per item, you will receive $10. On the other hand, the differential piecework rate rewards employees at a rate that is not fixed. Usually, the rates will increase if your job performance exceeds the average worker. One example would be that if you produce 10 items you will receive $1 per item, but if you produce 20 items you will be paid $2 per item. The person producing 10 items will be given $10 while the person producing 20 will be given $40. Another incentive discussed by Root is time off. He believes that you can offer vacation days to employees to promote loyalty and a better work ethic. By giving them breaks, they will refresh their minds and work more efficiently the following day. Also, it will give them more time to formulate solutions to problems they are having at work. I believe that taking breaks are a key component to a healthy workstyle. It helps the employee refresh their minds and to think of alternatives to difficult situations at a work site. One example would be taking a break after using your whole day to create a company financial report. After you are burned out, you will want to take a break before starting another one. This will allow you to refresh your memory and prepare to take on the second report. Stock options are also discussed in the article. Stock options allow employees to buy a certain number of shares of stock at a specified price (Noe 408).
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