Incentive Pay

As a manager the three motivational methods that should be used would be to provide monetary incentives, employee recognition, and training incentives. Monetary incentives are one method that can be used by a leader or a manager in his or her workplace, these incentives is to reward an employee for his or her outrageous work-related performance. These incentives may include such as profit-sharing within the company, stock options, performance bonuses, and scheduled bonuses. These different types of monetary incentives can increase the motivation of its workers and can lead to more productive, less absenteeism, and may improve one’s quality of service. Monetary incentives when awarded to one employee may also be a morale booster can also encourage other workers to improve his or her work performance, and maintain a healthy, friendly, positive work environment. A healthy workplace is a product of a successful and productive work environment. Working in this kind of economy, monetary incentives is the excellent method to use. However, these incentives may persuade others and may not to some; the result will be the same, increased quality work

In this process what many companies have researched, employees are more confident in a plan if it is one that they feel they have helped developed. Goal achievement is also closely linked to how the company rewards their employees. The manager should also be included into this, by allowing managers to manage a budget. If goals are met with the budget the manager should also be rewarded with some type of commission or bonus. Many organizations use incentive programs to encourage employees to achieve goals and to implement plans properly. Commissions, salaries, promotions, bonuses, and other rewards are based on successful performance.

Every organization should have some type of incentive plan for staff. As previously mentioned, it is important to keep staff motivated to edify the success of an organization. Motivation and incentive concepts are closely linked because they both encourage staff to perform in a better way. The difference is that motivation can be words, but incentives are typically tangible and specific. According to the Houston Chronicle, incentive plans offer recognition and rewards to employees for meeting pre-established goals or objectives. This can include cash bonuses, profit sharing, additional paid vacation time or any range of prizes such as gift cards, corporate merchandise or other products or services (McQuerrey n.d.). Again, the objective is to motivate and to ensure its effectiveness the goal of the incentive program being offered must be clearly defined, viable and valuable for whatever the staff is being asked to do.

Individual Incentive Plan: They reward their employees who hard work hard to achieve their goals conducted independently. For the company to have such a program works well in motivating their employees to want to succeed. By having the incentive programs is a much easier way for Capital One to assess each employee performance individually. Employees would standout more in area in which they are much more industrious, while area that they are lacking would be much more outward.

Individual incentive pay plans reward employees for meeting one or a combination of performance standards (e.g. productivity, safety, or attendance) set by the employer (Martocchio. 2013). Piece- rate pay is one of four individual incentive plans offered in the employment industry. Employers have two options to select from when choosing this incentive plan. The first option is compensating the employee hourly for each piece over the given production number. The second option is compensating employees based on established subjective (quality) and objective (quantity) performance standards. In both options the employee is, essentially, being compensated for the work he or she does and not what could have been completed (Gibbons. 1987).  Motivation,

The right compensation program will depend on the organization’s business strategy and goals. To achieve these, an organization must recruit and select the best possible employees. To attract such employees, there must be an attractive compensation plan. Competitors will be offering different payment options, this may be based on pay rate or special perks, and a company’s stock options. Organizations must be aggressive yet reasonable to compete with competitors. Retaining and encouraging employees to perform at their best may be achieved through an immediate incentive award

The best performance incentive plans are the ones that work, of course, but what works for employees - cash or days off - might not be what your organization can afford. Incentive plans that are effective at motivating billers must be affordable and targeted to specific results. Most importantly, they must be finite - that is, not a permanent entitlement.

Performance, pay and reward: employers should set clear and transparent targets in order to make it easier for employees to know what is expected of them. If these targets are followed employees can be rewarded and this should improve the relationship between employer and employee.

A reward system program should be linked to a complex performance management system to help the employee stay on track for their individual goals.

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.

“Year after year, as executive pay continues its inexorable climb, it's amusing to watch corporate directors try to justify the piles of shareholder money they throw at the hired help (Morgenson 1)”. There are many employees that go the extra mile and produce more for their company, but they often never receive anything extra in return. Due to this, they are less motivated to go the extra mile in the future. In contrast, incentive pay is beneficial to an organization’s overall production efficiency and effectiveness.

Therefore, it leads to the conclusion that in this case the main issue is appropriate employees motivation and satisfying job conditions, which could be achieved by choosing right incentives plan. However, sticking to the same incentives plan also might not be a good idea because people usually get used to such things very easily. As it can be seen from Engstrom Auto Mirror Company’s case employee’s motivation and morale can

Pay structures, regardless of the size of the organization, must have two things going for them, which are external and internal equities. In order to give employees purpose to continue to give their loyalty and retention, there must be incentives as paying for education, experience and training, job tenure, demonstrated skills, or a combination of these attributes consistently. Organizations should develop a well written compensation program which includes incentives, and addresses both external and internal equities.

Similarly, Cascio (1991) suggests that the combination of the following five requirements along with a performance based pay system can also have a very significant impact on performance. The first of these is skill variety, where a wide variety of tasks or procedures is available to the employee. Next is task identity, where the employee can clearly identify the output of a task as a product of their efforts. This is followed by task significance, where the work is recognised as important and meaningful. After this comes autonomy, where the employees have a major say in work planning and execution. The final requirement is feedback, where employees receive constructive advice or criticism on their performance.

There are three main types of incentive plans an organization can be practiced. These are individual incentive plans, group incentive plans and company-wide incentive plans. Moreover, suggestion plans and positive reinforcement programs can be considered as incentive plans (French, 1990). Flexible reward systems linked to an individual employee performance called individual incentive plans. Merit pay, piece-rate pay, bonuses and special