Check Point - Incentive Plans

Check Point - Incentive Plans - An entire company is...

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An entire company is affected by how management chooses to motivate employees. There are many ways to reward a company's employees. Since there are so many different kinds of rewards and different reasons to reward, management crafts different incentive plans for different results. In order to make these plans, though, management needs to know the company goals. Once they have pinpointed these goals, they can use an incentive plan to contribute to meeting these goals. A manager can set up incentives for individuals, groups, or use both types. The type of incentive plan is not important – it is important that the plan works and achieves its goals. Ketter (2002) says, of an effective reward and incentive system: “For an organization to have an effective reward system its managers must understand how effectiveness is to be achieved and what its employees consider to be the important factors in determining quality of work life” (Designing Effective Reward Systems ¶, 1). This paper lists three different kinds of incentive plans, and the positive and negative points of each one. The first example is Team Compensation. “Team incentive plans reward team members with an incentive bonus when agreed-on performance standards are met or exceeded. Furthermore, the incentive will seek to establish a psychological climate that fosters team cooperation” (Bohlander & Snell, S. A., 2007, p.453). One problem with team compensation is that all teams are different from each other. “For example, cross-functional teams, self-directed teams, and task force teams make it impossible PROS • Team incentives create a “team culture” based around the group working together to plan and solve problems. • An individual's recognition depends on their cooperation with the group. • Team incentives reward a large variety of positive behaviors, motivating employees to many positive
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Check Point - Incentive Plans - An entire company is...

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