tthrm22payforperformance2_10

Complexpayoutformulascanbedifficultforteam

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Unformatted text preview: ndividual standards. Team incentives encourage cross­training and the acquiring of new interpersonal competencies. Team Incentive Plans (cont’d) Team Incentive Plans (cont’d) Disadvantages Individual team members may perceive that “their” efforts contribute little to team success or to the attainment of the incentive bonus. Intergroup social problems—pressure to limit performance and the “free­ride” effect may arise. Complex payout formulas can be difficult for team members to understand. Group Incentive Plans (cont’d) Group Incentive Plans (cont’d) Gainsharing Plans Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability. Gainsharing Incentive Plans Scanlon Plan Scanlon Plan Rewards come from employee participation in Rewards come from employee participation in improving productivity and reducing costs. improving productivity and reducing costs. Rucker Plan Rucker Plan ((SOP) SOP) Shared rewards come from the difference between Shared rewards come from the difference between labor costs and sales value of production. labor costs and sales value of production. Improshare Improshare Gainsharing based on increases in productivity of Gainsharing based on increases in productivity of the standard hour output of work teams. the standard hour output of work teams. Encourages employees to achieve higher output Encourages employees to achieve higher output Earnings-at-risk and quality standards by placing a portion of their Earnings-at-risk and quality standards by placing a portion of their base salary at risk of loss. base salary at risk of loss. Scanlon Plan Suggestion Process Scanlon Plan Suggestion Process Enterprise Incentive Plans Enterprise Incentive Plans Profit Sharing Any procedure by which an employer pays, or makes available to all regular employees, in addition to their base pay, current or deferred sums based upon the profits of the enterprise. Challenges: A...
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