| For an organization to continue to motivate its employees, individual performance must be recognized and rewarded. If structured properly, incentive plans or pays for performance plans can achieve outstanding results. Our consultants develop customized incentive programs that allow maximum flexibility as an integral part of total compensation.
Pay For Performance: Linking pay to employee behavior generally results in better individual and organizational performance. Some of the more prevalent systems are listed below.
Merit Pay: A reward that recognizes outstanding individual performance for past work or accomplishments. Given as increments to the base pay.
Lump Sum Bonus: A reward that recognizes outstanding individual performance for past work or accomplishments. Distributed as a onetime payment.
Individual Incentive Plan: Incentive compensation that is tied directly to objective measures of individual performance. For example sales volume, units produced, efficiency etc.
Gain Sharing: Bonus is paid based on some specific measure of group performance rather than individual performance. For example cost savings, increased profit, decreased downtime, etc.
Profit Sharing: A form of group bonus dependent upon meeting or exceeding a financial goal of the team, division or company.
Pay for performance plans can be an effective means of motivating employee behavior in support of corporate objectives. The design and effective administration of these plans is key to their success. |
