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Chapter 12

Chapter 12 Human Resources.docx

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Department
Business
Course
BUS 3000
Professor
Nita Chhinzer
Semester
Winter

Description
Chapter 12 Human Resources PayForPerformanceFinancial IncentivesMONEY AND MOTIVATIONTodays efforts to achieve the organizations strategy through motivated employees include financial incentives payforperformance and variable compensation plans Variable Pay Any plan that ties pay to productivity or profitabilityMore than 80 of Canadian Employers have one or more type of variable pay plans in placeAccurate performance appraisal or measurable outcomes is a precondition of effective payforperformanceAnother important factor us line of sight or the extent to which an employee can relate hisher daily work to the achievement of overall corporate goalsTypes of Incentive PlansIndividual incentive programs give income overabove vase salary to certain exceeding employeesInformal incentives may be awarded for accomplishments that arent readily measured by a standard Eg To recognize extraordinary customer service this weekGroup incentive programs provide overabove base salary to teams who excelOrganizationwide incentive plans provide monetary incentives to all employees of the organization Eg Profitsharing plansGainsharing programsNonMonetary recognition program motivate employees through praise and expression of appreciationINCENTIVES FOR OPERATIONS EMPLOYEES Piecework Plans Piecework A system of pay based on theof items processed by each individual worker in a unit of time such as items per hour or items per dayDeveloping a workable piecerate plan requires both job evaluation and probably industrial engineering Productions standard usually developed by industrial engineer Straight piecework plan A set payment for each piece produced or processed in a factoryshop Guaranteed piecework plan The minimum hourly wage plus an incentive for each piece produced above a set number of pieces per hourAdvantagesDisadvantagesSimple to calculateeasily understood by employeesOften has bad reputation among employees based on some employers habits of raising productions standards whenever they found their workers were earning excessive wagesQuality standards can be overlooked because employees trying to reach productions standards Standard Hour Plan Standard Hour PlanA plan by which a worker is paid a basic hourly rate plus an extraof hisher base rate for production exceeding the standard per hour or per day Same advantages of piecework Team or Group Incentive PlansOne way to implement these would be to set work standards for each memberthen members are paid by 1 All members receive the pay earned by the highest producer 2 all members receive pay earned by lowest producer or 3 all members receive payment equal to average pay earned by the group Another way is to set up a production standard based on the final output of the group as a whole all members then receive the same pay rd 3 option is to choose a measurable definition of group performance or productivity that the group can controlINCENTIVES FOR SENIOR MANAGERS AND EXECUTIVESMost employers award their senior managers and executives a bonus or an incentive bc of the role they play in determining divisional and corporate profitabilityShortterm Incentives The Annual Bonus 3 main issues to consider about shortterm incentives Eligibility Key position jobbyjob review is conducted to identify key jobs Salary level cutoff point All employees earning over certain point are automatically eligible
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