Incentive Plans

Incentive Plans

MKT/431

September 5, 2011

Incentive Plan

Incentive plans are vital to attaining organizational goals. Developing a productive incentives plan may guarantee increased inspiration and ethics among teammates while helping to secure obligations, reliability, and working to achieve organizational events, task, and procedures. A productive incentive plan guarantees teammates will be enthusiastic in regard to his or her contributions and achievements to the organizational goals helping the teammates realize he or she are a part of the big picture. When an organization decides to develop an employee incentives plan the human resources department must select the type of incentives to offer employees, by selecting from a number of incentives like profit sharing, stock options, and group bonuses and team awards, etc. This dissertation will review how incentive plans assist organizations to accomplish its goals and objectives.

According to Fundamentals of Human Resources Management (2007), “Profit sharing is and incentive in which payments are a percentage of the organizations profits and do not become part of the employee’s base salary” (p. 403). Organizations take pride in using this type of incentive to motivate employees by conveying when the company’s profits are strong than the organization will share the fruits of his or her labor by dividing the profits among the employees within the organization. Profit sharing may encourage teammates to view his or her performance like that of a business owner while increasing the level of daily performance output. Profit sharing may also encourage employees to look at the broader picture in regard to the performance necessary to achieve the organizational goals. Although there is no data to substantiate whether or not profit sharing has helped establishments to achieve or exceed the organizational goals through increased performance. The important thing for everyone to understand is with profit sharing the...