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Chapter 12

Human Resources Management Chapter 12

4 Pages
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Department
Human Resources
Course Code
MHR 523
Professor
Kristyn Scott

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Chapter 12 Notes
MONEY AND MOTIVATION
-variable pay: any plan that ties pay to productivity or profitability
-top performers must get top pay in order to secure their commitment to the organization
TYPES OF INCENTIVE PLANS
-individual, group, organization-wide, non-monetary recognition
INCENTIVES FOR OPERATIONS EMPLOYEES
PIECEWORK PLANS
-piecework: a system of pay based on the number of items processed be each individual worker in a unit
of time, such as items per hour or items per day
-straight piecework plan: a set payment for each piece produced or processed in a factory or shop
-guaranteed piecework plan: the minimum hourly wage plus an incentive for each piece produced above
a set number of pieces per hour
-advantagesÆ simple to calculate and easily understood
-disadvantagesÆ unsavoury reputation; attempt to revise piecework standards, workers become
resistant
STANDARD HOUR PLAN
-standard hour plan: a plan by which a worker is paid a basic hourly rate plus an extra percentage of his
or her base rate for production exceeding the standard per hour or per day. It is similar to piecework
payment but is based on a percentage premium.
-less tendency for workers to link their production standard with pay
TEAM OR GROUP INCENTIVE PLANS
-team or group incentive plan: a plan in which a production standard is set for a specific work group and
its members are paid incentives if the group exceeds the production standards
-effective when:
1) there are high levels of communication with employees about the specifics of the plan
îÁZvZ]}vPÁ}l]vÀ}oÀuv]vZov[]Pvv]uouv]}v
3) group members perceive the plan as fair
INCENTIVES FOR SENIOR MANAGERS AND EXECUTIVES
SHORT-TERM INCENTIVES: THE ANNUAL BONUS
-3 issues when awarding short-term incentives:
1) eligibilityÆ 3 criterion to decide 1) key position, 2) salary-level cut off point, 3) salary grade
2) How much to pay out (Fund size)Æ 2 formulas to use 1) non-deductible formula, 2) deductable
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Description
Chapter 12 Notes MONEY AND MOTIVATION -variable pay: any plan that ties pay to productivity or profitability -top performers must get top pay in order to secure their commitment to the organization TYPES OF INCENTIVE PLANS -individual, group, organization-wide, non-monetary recognition INCENTIVES FOR OPERATIONS EMPLOYEES PIECEWORK PLANS -piecework: a system of pay based on the number of items processed be each individual worker in a unit of time, such as items per hour or items per day -straight piecework plan: a set payment for each piece produced or processed in a factory or shop -guaranteed piecework plan: the minimum hourly wage plus an incentive for each piece produced above a set number of pieces per hour -advantages simple to calculate and easily understood -disadvantages unsavoury reputation; attempt to revise piecework standards, workers become resistant STANDARD HOUR PLAN -standard hour plan: a plan by which a worker is paid a basic hourly rate plus an extra percentage of his or her base rate for production exceeding the standard per hour or per day. It is similar to piecework payment but is based on a percentage premium. -less tendency for workers to link their production standard with pay TEAM OR GROUP INCENTIVE PLANS -team or group incentive plan: a plan in which a production standard is set for a specific work group and its members are paid incentives if the group exceeds the production standards -effective when: 1) there are high levels of communication with employees about the specifics of the plan ZLZ]ZZ}L2}l]L}oKL]LZoL[ZZ]2LL]KoKL]}L 3) group members perceive the plan as fair INCENTIVES FOR SENIOR MANAGERS AND EXECUTIVES SHORT-TERM INCENTIVES: THE ANNUAL BONUS -3 issues when awarding short-term incentives: 1) eligibility 3 criterion to decide 1) key position, 2) salary-level cut off point, 3) salary grade 2) How much to pay out (Fund size) 2 formulas to use 1) non-deductible formula, 2) deductable www.notesolution.com
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