ADMS 2600 Chapter Notes - Chapter 10: Pension, Profit Sharing, Firstclass
6 Dec 2013
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Document Summary
Ways in which canadian organizations were forced to adapt after the recent economic: Pressures on employees to curb their pay and benefits and/or grant concessions, especially in the public sector. Aligning the interests of the employees with the interests of the company: choosing the right incentive plans based on organizational objectives, setting up performance measures, administering those incentive plans. Strategic reasons for incentive plans incentive plans (variable pay programs) Incentives focus employee efforts on specific performance targets - provide real motivation that produces important employee and organizational gains. Incentive payouts are variable costs linked to the achievement of results - base salaries are fixed costs largely unrelated to output. Incentive compensation is directly related to operating performance- incentives are paid if performance objectives (quantity and/or quality) are met; withheld if objectives are not achieved. Incentives foster teamwork and unit cohesiveness when payments to individuals are based on team results.
