Incentive Plan Paper University of Phoenix Abstract Incentive plans can be both a positive and a negative for any organization. Employees can either do what is right, and work towards not only preparing to help themselves, with the incentives being offered, but also achieve the company goal in light of the incentive plan. On the other hand, some employees may take advantage of the incentive plan and do just enough to receive their incentive, while not truly taking the organization’s plans into account.
In the past not all employees used to be offered incentives. It was reserved for employees that were top executives, piece workers, sales personnel, and. Today most corporations, both large and small, offer an incentive package that excludes no employees. Some kind of incentive pay is an imperative element of any compensation plan. Incentive pay expresses appreciation and establishes a sense partaking in the company’s well-being that straight salary dollars, no matter how large, do not suggest.
A well-designed incentive-pay plan can also helps to pull people together, help point them in the road the organization wants them to go, and gives that additional push that many companies needs in the current competitive environment. There are many types of incentive plans that an employer can offer their employee to achieve their objectives. It is important, however, that employers constantly review the statistics involved with the incentive plans that they have been utilizing.
Employers need to ensure that the incentive plans do not become stale and therefore lose its main objective, which is to motivate employees in order to the organization’s goals to be met. Frequent evaluations of incentives also allow companies to make tweaks and other modifications if the plan is not delivering the intended results. It’s a mistake to flip the switch on an incentive plan and let it run without evaluating its performance. Too many companies end up with results that are not what they wanted.
Many companies tend to focus very heavily on operational efficiency and designed an incentive plan to reflect that emphasis. However, once the incentive plan was up and running, the company realized that some of the operational decisions the incentive plan was rewarding were actually detrimental to its customer relationships. Incentive plans are utilized to motivate an employee to achieve an organization’s objectives. By providing workplace incentives like free lunch, competitive rates, and consistent work.
These incentives also help the company to meet sales objectives and deadlines. Still, the company is able to offer competitive prices because of the payment terms negotiated with workers. These workers also generate a high level of customer referrals, and we attribute this to the incentive plans that include bonuses paid for referrals that result in a signed contract. Among one of the more popular incentive methods is profit sharing. Profit-sharing plans are probably the most widespread incentive-pay programs at larger corporations.
They are generally company-wide and made available at least to all full-time employees. Usually the company will contribute a small percentage of its pre-tax profitability to a pool, which is then divided among eligible employees. Division is typically prorated according to the base salary of each participant. Profit sharing is generally done on an annual basis. At some firms profit sharing may be directly contributed as pre-tax dollars into a retirement program, such as a 401K program. Incentive plans need to have some justification.
They should not be made solely to motivate employees. Employees need to want to help the organization. The only way that an employee can be successful in their careers is for the employer to also be successful. Therefore, both employees and employers need to be involved in some part of the objectives of the organization, and thereafter some motivation tactics to achieve the organizational goals. It is important that the employer choose the right incentive plan for each individual employee and for the organization itself, in order to achieve its goals.
References Cesyniene, R. (2008). Globalization and Human resource management. Retrieved December 4, 2010, from http://www. leidykla. eu/fileadmin/Ekonomika/82/41-56. pdf Faugoo, D. (n. d. ). Globalization and Its Impact on Human Resource Management. Retrieved December 4, 2010, from http://www. wbiconpro. com/13. Deepika-. pdf Human Resource Management. (n. d. ). Retrieved December 4, 2010, from http://www. pearsoned. ca/highered/divisions/virtual_tours/dessler/dessler_ch01. pdf Hamerman, P. D. , Thomas, Z. Leaver, S. ; Donnelly, M. (2008). Trends 2009: Human Resource Management. Retrieved December 5, 2010, from http://ihrim. org/Pubonline/Wire/Dec08/Trends%202009_Human%20Resource%20Management. pdf Human Resource Management and Diversity. (n. d. ). Retrieved December 5, 2010, from http://www. download-it. org/free_files/filePages%20from%209%20Human%20resource%20management%20and%20diversity. pdf Jackson, S. E. , Schuler, R. S. , ; Werner, S. (2008). Managing Human Resources (8th Edition). New York, USA: Cengage Learning