BU354 Chapter : Ch9 - Pay-for-Performance & Financial Incentives
Document Summary
Financial incentives, pay-for-performance, and variable compensation plans are used to motivate employees to achieve the strategic objectives of an organization. Variable pay: any plan that ties pay to productivity or profitability. It is important to ensure that whatever incentive is being provided is appealing to the individual receiving it. Individual incentive gives income over and above base salary to individual employees who meet a specific individual performance standard. Informal incentive generally awarded to individual employees, for accomplishments that are not readily measured by a standard, such as to recognize exemplary customer service this week. Group incentive provide payments over and above base salary to all team members when the group or team collectively meets a specified standard for performance, productivity, or other work-related behaviour. Organization-wide incentive provide monetary incentives to all employees of the organization; e. g. profit- sharing plans. Non-monetary recognition programs motivate employees through praise and expressions of appreciation for their work.
