STUDENT NAME

COURSE TITLE

PROFESSOR NAME

DATE

RECOGNIZING EMPLOYEE CONTRIBUTIONS

INTRODUCTION

• Incentive scheme is to encourage and promote specific behavior and actions

• It is a part of Employee motivation program

• Incentives could be Financial , semi- financial or non financial

• There are individual as well as group incentives

• The objective of incentive plan is to attain maximum results and enhance productivity

OBJECTIVES

• It is important to fix the duration of incentive to retain the focus

• The employees should be reminded of it so as not to lose sight of their aim

• Highly decentralized-different SBUs should design their own incentive schemes

(Sustainable Employment Motivation., 2013).

CONTD.

• The results-only base of performance should be delinked from the fixed pay to

• Increase the motivational value of incentive

• Base pay doesn’t become high fixed cost

(Barr, 2004)

METHODS TO DETERMINE INCENTIVE PAY

• 1. Based on the ratio of number of students being enrolled by an employee to the total number of students enrolledThis would help in motivating an employee to enroll more number of students by taking proactive measures

2. Quality and background of students being enrolled by an employee in integration with the first methodTo increase the number of students, Employees would end up adding poor quality students without verifying their background

TECHNIQUES FOR MEASURING VALUE OF SHAREHOLDERS

•Appraisals mainly on the basis of financial statements

• The second is for Exchange-listed companies as it is stock market analysis, it gives an indirect measure of shareholder wealth

• The third is the combination of above two

TECHNIQUES FOR ASSESSING CUSTOMER VALUE

• Profit: The profit a customer is giving to the organization

• The Retention cost of the customer

• The cost to the organization if a customer switches to other organization

TECHNIQUES FOR ASSESSING EMPLOYEE VALUE

• Initiative: Does that employee take initiative or just follow the traditional roadmap

• Loyalty: A valuable employee is the one who does his or her work diligently

•Cost efficiency: A valuable employee is one who trades a valuable skill set for his or her pay scale

DIFFICULTIES

• There could be a neglect of important goals that are not directly associated with incentives• Incentives at times are not required as per the

present needs, for example- the target is getting achieved without much efforts• Incentives do not help an unskilled employee

to perform•Measurement of standard performance is

difficult

HIGHLIGHTS

•A results-only base of performance can bring in insecurities in times of downturn.

• This can bring down employee morale.

• The incentive design should hence be short term oriented and flexible.

• It should encourage healthy competition among fellow professionals.

(VisionLink Advisory Group., 2013).

PAY TO PERFORMANCE CRITERIA

• Performance plans should be in alignment of shareholders financial objectives

• Schemes should be communicated clearly and effectively

• Employment of a proper mix of compensation elements is important

• It should embrace employees’ performance and create an impact

OBSTACLES

DISADVANTAGES

• Administrative work increases thus supervisors avoid to introduce new incentive and assessment schemes

• Standards to measure should be clearly defined and should be moderate else they are not effective

• Wide fluctuation in productions makes the task more difficult

• Employee overlook their personal safety in order to make incentives

TYPES OF INCENTIVES

• Financial rewards; Fulfill certain monetary requirements of employees and are dominant in forms of incentives• Incentives in the form of recognition as

Employee of the year award; •  Non-Tangible benefits like a trip ;this type of

reward can go a long way in terms of employee satisfaction.

(Dorantes & Mach, 2003)

ETHICAL ISSUES

• If an employee is unable to achieve his/her target because of external factors such as Industry downturn, Macroeconomic factors, Organization issues then the total take home pay for the employee would be unjustified if incentive is a large portion• If performance measures are not standard then

organization can manipulate the total pay as performance is not evaluated fairly

REFERENCES

• Barr, S. (2004). “Pay-for-performance system makes an uneven debut among SES corps.” Federal Diary, the Washington Post, February 9, 2004, p. B2.

• Dorantes, C., & Mach, T. (2003). Performance pay and fringe benefits: Work incentives or compensating wage differentials?. International Journal of Manpower, 23(6), 673 - 698. 

REFERENCES

• Sustainable Employement Motivation. (2013). Incentive Programs: The Five Pillars of Successful Implementation. Retrieved September 2, 2013, from http://www.sustainable-employee-motivation.com/incentive-programs.html• VisionLink Advisory Group. (2013). en Steps to

Building an Effective Incentive Plan. Retrieved September 2, 2013, from http://www.vladvisors.com/compensation-information/Building-an-Incentive-Plan-article.aspx -