MHR 523 Lecture Notes - Lecture 9: Intranet, Adverse Selection, Life Insurance
24 Mar 2017
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Lecture #9: chapter 12 - pay for performance and financial incentives. Any plan that ties pay to productivity or profitability. May be in addition to base pay. Difficult to adjust for changes in hour rates. Quality may be comprised: set standards for each member of the group. Members paid based on average performer: sets standards for the group as a whole. All members paid equally: use a group defined measure of performance. Production standard is set for a specific work group. Incentives paid if the group exceeds the standard. Pay in direct proportion to sales generates. Salary usually based on seniority, demotivating for high performing salespeople. Any salary increase awarded to an employee based on individual performance. Usually an on-going increase to base pay. Success depends on validity of performance appraisal system. Relatively high salaries; increases are not as motivating. Often driven by high quality and peer recognition.
