HR_Chapter 12.doc

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Human Resources Management
HRM 200
Katrina Di Gravio

Chapter 12 PayforPerformance and Financial IncentivesMoney and MotivationVariable Payplan that links pay to productivity profitability or some other measure of organizational performancemore than 85 percent of Canadian employers have one or more types of variables pay plans in place prerequisite for effective variable pay plans is line of sight or the extent to which an employee can relate his or her daily work to the achievement of overall corporate goals accurate performance appraisal or measurable outcomes is a precondition for effective payforperformance plansTypes of Incentive Plansindividual incentive programs give income over and above salary to individual employees who meet a specific individual performance standard ospot bonuses are awarded generally to individual employees for accomplishment that are not readily measured by a standard group incentive programs are like individual incentive plans but they give pay over and above salary to all team members when the group or team collectively meets a specified standard for performance or productivity oprofit sharing plans are generally organizationwide incentives programs that provide employees with a share of the organizations profits in a specified period ogainsharing plans organizationwide pay plans designed to reward employees for improvements in organizational productivityinclude employee suggestion systems and focus on reducing labour costs Incentives for Operations EmployeesPiecework plansstraight guaranteed this is alright in Ont but not in AlbertaoPiecework is the oldest incentive and most commonly usedoEarnings are tied directly to what the worker produces the person is paid a piece rate for each unit that he or she produces oDeveloping a workable piece rate requires both job evaluation and industrial engineering oCritical issue is the production standard industrial engineering which is the standard number of minutes per unit or standard number of unites per houroStraight piecework plan is a set payment for each piece produced or processed in a factory or shopoGuaranteed piecework plan is the minimum hourly wage plus an incentive for each piece produced above a set number of pieces per houroADV simple to calculate and easily understood appear equitable and rewards are directly tied to performanceoDIS employers habits of arbitrarily raising production standards whenever they found their workers earning excessive wages the revising of a piece rate when a new job evaluation results when an attempt to revise production standards is made it meets considerable worker
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