MHR 749 Chapter Notes - Chapter 11: Life Insurance, Avail, Constant Function
5 Dec 2014
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Incentive plans, variable pay plans, compensation at risk, earnings at risk, gain sharing, profit sharing. Pay that varies with measure of individual or organizational performance (only base pay & across board increases don"t fit w/pp) Merit pay is still pay for performance used in managerial, clerical & admin. 94% of private sector employers & 60% public sector employers have at least one variable pay: increasing completion from foreign products forces n. american products to cut costs/increase productivity. Well designed variable pay plans have a proven track record of motivating performance & helping cut costs: face paced business environment means workers must be willing to adjust to what they do & how they do it. New technologies, new work processes, new work relationships (adapt to changes in speed) If they don"t adapt, market share goes to competitors, results in layoff & termination. To avoid the scenario, focus on designing reward systems & ways of performing old jobs.
