Incentive Reward Program Essay

853 Words May 30th, 2013 4 Pages
Pay-for-Performance: Incentive Reward Program

Pay-for-Performance: Incentive Reward Program

The question of “how much does this job pay?” comes easily to most employees however they sometimes fail to recognize the complex nature that compensation and benefit programs have within an organization. There needs to be a distinct balance between these two areas – addressing the needs of the workforce but at a reasonable cost to the employer. It can be unique, especially as the generations are requiring different benefits for different work/life styles. Pay for performance is given to employees as a result of a good performance. As a Vice President of Human
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Pay-for-Performance: Incentive Reward Program

Recognition pay is noncash rewards that are given to employees as a result of meeting the organization’s goals and objectives. With merit-base pay, employees receive the pay regardless of performance and it is set at a market rate. With pay at risk, employees receive base pay that is below the market average but are offered incentives for good performance. Which Rewards to Offer? We should offer the rewards of performance that are valued by employees. Any company makes different decisions when choosing the amount of the base pay. The general pattern is that more incentive pay is used for employees who are higher in the hierarchy. Any company should use some eligibility rules in order to determine who gets the reward. Eligibility rules differ from one company to another and it is affected by the company’s objectives. Generally, the better an employees’ performance, the more likely he is to be eligible for the rewards. In most companies, incentive pay is received from several weeks to a year after the performance being rewarded.

Performance-based pay should be directly linked to specific performance measures.
Tom Siebel ( a former CEO of Siebel Systems, now a part of Oracle) :“We use the
Score card system to ensure that our employees deliver customer satisfaction.
For example, the incentive compensation of everyone in the company-the
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