Incentive Pay

2667 Words11 Pages
Incentive Pay
(Research Paper)

Outline

I. Introduction

II. Body A. Importance of incentive Pay plan. B. Types of incentive pay. 1. Individual incentive plans 2. Group incentive plans. 3. Companywide incentive plans. C. Advantages of Incentive Pay D. Designing incentive pay plans. E. Incentive pay and the motivational models. F. Problems.

III. Conclusion.

Abstract 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
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Individual incentive pay plans are most appropriate under three conditions; • First, employee’s performance can be measured objectively, • Second, individual incentive plans are appropriate when employees have sufficient control over work outcomes, • Third, individual incentive plans are appropriate when they do not create a level of unhealthy competition among workers that ultimately leads to poor quality. Individual Incentive plans reward employees for meeting such work-related performance standards as quality, productivity, customer satisfaction, safety or attendance. Any one of these standards by itself or in combination may be used. A company ultimately should employ the standards that represent work that an employee actually performs. When designed and implemented well, individual incentive plans reward employees based on results for which they are directly responsible. The end result should be that excellent performers receive higher incentive awards than poor performers. There are four types of individual incentive plans; • Piecework plan. Under piecework plans an employee’s compensation depends on the number of units he or she produces over a given period. • Management incentive plans. These plans award bonuses to managers when they meet or exceed objectives based on sales, profit, production or other for measures their
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