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Economics (681)
ECO244Y5 (9)
Lecture 2

Week 22

3 Pages
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University of Toronto Mississauga
Reid/ Curran

Textbook: Week 22 - Chapter 12 Money and Motivation Variable pay is any plan that ties pay to productivity or profitability. o The fundamental of this is that top performers must get top pay in order to secure their commitment to the organization. Types of Incentive Plans o There are several types of incentive plans: Individual incentive programs give income over and above base salary to individual employees who meet a specific individual performance standard. Informal incentives may be awarded, generally to individual employees for accomplishments that are not readily measured by a standard. Group incentive programs are like individual incentive plans, but they provide payments over and above base salary to all team members when the group collectively meets a specified standard for performance, productivity, or other work-related behaviour. Organization-wide incentive plans provides monetary incentives to all employees of the organization. Non-Monetary cognition programs motivate employees through praise and expression s of appreciation for their work. Incentives for Senior Managers and Executives Most employers award their senior managers and executives a bonus or an incentive because of the role they play in determining divisional and corporate profitability. Short-Term Incentives: The Annual Bonus 3 Basic
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