8 rewrds
TRANSCRIPT
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Motivation
&Monetary Rewards
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INCENTIVES
INTRODUCTION
IMPORTANCE FOR EMPLOYEES
EXAMPLES
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INDIVIDUAL INCENTIVES
Under a system of individual incentives,all or a portion of an individuals pay is tied
to their performance
Examples
Piece Rate incentive plans
Sales Commission plans
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PAY FOR PERFORMANCE SYSTEM Merit System also called Pay for performance System
is a system in which employees receive rewards astheir performance improves
Successful if performance standards are clearlyexplained:
PURPOSES:
Attain strategic goals
Reinforce Organizational norms
Motivate Performance of individual at group andOrganizational level.
Recognition of employees contribution
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PAY FOR KNOWLEDGE SYSTEM
A System in which employees receive rewards
as they learn to perform additional tasks oracquire new skills
Satisfied higher level needs e.g Recognition :
FEATURES : Top Management desired continual learning
Simplicity in rearwards
Individual focus. Generate healthy competition among
employees
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ADVANTAGES OF INDIVIDUALIZED
INCENTIVE PLANS
Raise Productivity :
Lower production costs:
Increase earning of workers Less Direct supervision is required
Payments by results
Optimum accuracy standards
Costing and Budgetary control
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DISADVANTAGES OF INDIVIDUALIZED
INCENTIVE PLANS
Detoriation in Quality level
Resistance in implementation of change
Low creativityMaintenance problems in Production floor
Difficulty in adjustment of new employees
Stereotype thinking
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GROUP INCENTIVES
Under a system of group incentives,performance of an individuals
Compensation is tied to group
performance
Examples
Pepsi Co: Stocks to employees (10% ofBasic Pay)
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PROFIT SHARING
A reward system in which employees receivebonuses based on the organizations profitability
FEATURES:
Profit = Revenue
Expense
Employees are paid in cash or deferred into aretirement plane
Encourage employees to thin about all aspects of thebusiness and act accordingly
Less direct control
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GAIN SHARING
A reward system in which employees receive
bonuses based on their units profitability
FEATURES:
Productivity standards Perceived fairness of the formula
Monthly or quarterly payouts
Formula is tied to Group or Deptt performancemeasures
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ADVANTAGES OF GROUP INCENTIVEPLANS
Positive impact on Organizational &Individual performance
Easier to measure Group incentives thanIndividual plans
Improvement in organizational harmony
Participation of employees in DecisionMaking
Teamwork meets with enthusiasm
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DISADVANTAGES OF GROUP
INCENTIVE PLANS
Individual performance affects
May lead to increased turnover
Lack of supervision may cause mutinyDominated Roles on past performance
Unfair credit to senior
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EMPLOYEE STOCK OWNERSHIP PLAN
(ESOP)
A reward system in which mangers encourageremployees to own stock in their own companiesproviding an incentive for employees to increasethe value of that stock through higher
performance
FLEXIBLE REWARD SYSTEM
A reward system that offers employees theoption of selecting the rewards they considervaluable
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SCANLON PLAN
Is the type of gain-sharing plan in which the
distribution of rewards for costs savings gains intitled toward employees and spread across the
entire organization. The plan focus on
improvements in productivity (Cost reduction)and not on profitability
EXECUTIVE COMPENSATION
Stock Options Bonuses
Base Salaries
perquisites
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THANKYOU
Hardwork is key to success