ADMS 2600 Study Guide - Final Guide: Standard Streams, Piece Work, Market Price

• School: York University
• Department: Administrative Studies
• Course: ADMS 2600
• Professor: Gordon Qi Wang

Document Summary

Strategic reasons for incentive plans: a major element of strategic compensation management is the use of incentive plans, also called variable pay programs, for employees throughout the organization, variable pay. Tying pay to some measure of individual, group, or organizational performance: incentives plans as links to organizational objectives. Incentive rewards are based entirely on pay-for-performance philosophy. Incentives pay programs establish a performance (cid:498)threshold(cid:499) (a baseline performance level) that employee or group of employees must reach to qualify for incentive payments: advantages of incentive pay programs, figure 10. 2 p. 361. For an incentive plan to succeed, employees must have some desire for the plan. This desire can be influenced in part by how successful management is in introducing the plan and conveying employees of its benefits. Encouraging employees to participate in developing and administering the plan is likely to increase their willingness to accept it.