7.Increased use for:a.Production workersb.Technical employeesc.Service workersd.Professionalse.Managersf.Executives8.Employees’ earnings potential is increasedExamples: Incentive Program• Lincoln Electric Company• Awards based on five performance criteria• Quality• Output• Dependability• Cooperation• Ideas• Job importance based on job evaluation techniques, five criteria• Skill• Responsibility• Mental aptitude
• Physical application• Working conditions• The company has awarded incentive payments for the last 75 years in both good and bad economies. The average annual incentive payment per employee amounts to 40 percent of annual salaryExamples: Incentive Program• H. Lee Moffitt Cancer Center and Research Institute, at the University of South Florida• Goals are to improve patient care and control costs• Incentives tied to the company’s:• Net income or operating surplus• Quality of care measures• Patient satisfaction scores• Operating efficienciesII.Contrasting Incentive Pay with Traditional Pay1.Traditional pay plans based on:Example: Incentive Pay Plan• Taco Bell Restaurants• Offer managers biannual bonus based on attainment of:• Target profit levels• Quality of customer service• Store sales• These incentives are used to motivate managers as they know about them ahead of timed.Incentive pay programs replace all, or a portion, of base pay to:i.Control payroll expendituresii.Link pay with performance2.Incentive pay
a.Designed to reward employees and teams for performanceb.Classified into three categoriesi.Individual-incentive plansii.Group-incentive plansiii.Company-incentive plansc.Levels tend to be based on even more objective criteriad.Awards are communicated in advance, merit awards are notExample: Typical Performance Measures per Incentive Plan• Individual-incentive plan• Quantity of work output• Quality of work output• Monthly sales• Work safety record• Work attendance• Group-incentive plan• Customer satisfaction• Labor cost savings• Materials cost savings• Reduction in accidents• Services cost savings• Companywide incentive plan• Company profits• Cost containment• Market share• Sales revenueIII.Individual Incentive PlansA.Defining Individual Incentives
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- Winter '14
- Management, Employment compensation, incentive pay, Rucker Plans, Traditional Pay, a. Scanlon