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Doincentiveplanswork whyincentiveplansfail

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Unformatted text preview: that are simple and understandable Are continuously communicated to employees to establish a clear link between performance and payout Effectively measure employee output and reward exceptional employee performance Do Incentive Plans Work? Do Incentive Plans Work? Why Incentive Plans Fail: Payout does not meet employee expectations for pay gains Poor design or poor implementation of plan creates confusion about incentive payment calculations Employees do not have capability to change their performance levels Environment does not support plan. Setting Performance Measures— The Keys • Performance measures—at all organizational levels—must be consistent with the strategic goals of the organization. • Define the intent of performance measures and champion the cause relentlessly. • Involve employees. • Consider the organization’s culture and workforce demographics when designing performance measures. • Widely communicate the importance of performance measures. Administering Incentive Plans Administering Incentive Plans Incentive systems are effective: When base...
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