Incentive Plans for Individuals and Groups

Introduction

Business Managers most often are seeking ways to increase productivity without necessarily adding more workers. To do this, employers often turn to incentive programs or plans as a motivational tool. Incentive programs may be individual or group based in nature, depending on the type of organization and the particular objective the employer wishes to achieve. There are a number of factors that help managers determine which type of incentive program is better for the organization.

Strategic organizations are continuously undergoing changes; cutting-edge managers are looking for new incentives to increase employee motivation and output. Managers and employers are learning that they can no longer hang onto only individual and group based incentive pay plans. As employers focus more on keeping top performers they now offer several type of incentive plans. Here are just a few of the incentive plans that managers and employers may use; Merit Pay, which rewards employee work and behavior that exceed standards, such as production or sales quotas, personal accomplishments, performance tests or certifications and business unit performance; Profit sharing is becoming more of a common form of incentive plan in which an organization sets aside a specific percentage of its pre-tax profits to give its employees; Employee Stock Ownership Plan (ESOP) allows employees to purchase stocks for less than current per-share market price. Stocks are placed in a trust fund, such as the company's 401k retirement plan; Non-cash bonus plans are also common, especially in customer-service-focused jobs. These bonuses may include brand name merchandise, tickets for special events, gift cards and recognition merchandise.

Discussion

Erbasi and Arat stated in 2012 that one of the several methods used to increase the motivation of employees is the incentive application. It is very common at such premises that there are often financial and non-financial incentive applications...