Hrm 531 Week 4 Individual Incentive Pay

How this system works is employees are paid a standardized salary which entitles extra benefits and or bonuses on the side. The main focus of benefits is to focus on stability, health, wellness, and lifestyle. These benefits are there to make the employees life’s more comfortable and enjoyable, not necessarily cash incentives. However, there are cash incentives offered as-well. Incentives are the drivers of employee performance, as short term incentives are cash bonus based on performance, or rather long term incentives being stocks in the company you work for. How we will implement this is through transferring your average paycheck to a salary. Meaning a 40-hour work week at 11.40 is $456 a week before deductions. The math equates to a base salary of 21,888. From there employees will be able to receive benefits or incentives based upon work efficiency. We will have assigned goals to achieve by set deadlines to determine employee efficiency. All employees in this system are inclined to do more work at a more efficient rate since they are now being rewarded further than their salary or prior their hourly wage. This business function being salary based with incentives and bonuses will take a greater toll on management. Management will be deemed in charge of bonuses and benefits. It will be their responsibility to determine whether said employee deserves certain benefits or certain incentives based on their work efficiency. As management takes on a heavier role in the company it is better for the greater good and is a sacrifice they will have to be willing to

Each employee will be paid based on their capabilities rather than on the characteristics of their job. This will provide an incentive for employees to develop their skills and move into other roles.

Three advantages of offering a piece-rate pay plan for Metropolitan Furniture is employee motivation, cost effectiveness, and quantity produced. Paying employees on a piece rate plan allows the employee to determine how hard they will work on a daily basis. If the employee know that their pay will be directly affected by how hard they work then they are more likely to always give a hundred and ten percent. Niemesh explains “others value a high income over leisure time and are willing to work more hours to achieve it (Niemesh, 2006). “More than three-quarters of employers (76%) say pay helps to motivate staff, according to the exclusive Employee Benefits/Lorica 100 Club research, published in June 2014 (Bettelley, 2014)”. The incentive of making

This would not only be advantageous for the employer but also the employee since it would result in higher wages. Due to this, the worker’s level of motivation and drive to do better would escalate leading to overall productivity of the organization (Salimath and Jones, 2011, p.88).

First, it gives the arms and legs a stake in the companies fortune. If everyone works as a team and production is up you get more money. Are you more likely to work harder if you know it will make a difference in your pay? GM is willing to put money on it being the case. Second, GM is trying assist in creating more jobs for the people of America. They can do this by paying less hourly with performance based incentives plus possible bonuses. This has the potential to save the company money on under performing personnel. “Manufacturers in general are primed for this compensation system because they can use very specific performance metrics: producing more units in less time for less money spells positive business results”("Why automakers are adopting pay for

A survey report for publicly traded companies administered by WorldatWork found that 99 percent of the 350 companies had some form of short term incentive pay system in place (Miller, 2014). Short term incentive pay compensates employees for achieving short term business goals that are typically a year or less. These goals can depend on factors such as the type of business, its specific strategy, and market conditions to name a few. Metrics for short term incentive plans can include financial metrics like revenue growth and profit maximization as well as non-financial metrics specific to the company, such as safety or quality assurance, customer satisfaction, and more (Fotsch & Case, 2015). Short term incentives normally reflect a percentage of the employee’s salary or wage; there are threshold, target, and maximum levels that can be achieved providing different levels of compensation based on outcome. Short term incentive pay can involve individual employee performance, or group & company wide performance. Some examples of short term incentive pay include merit pay, bonus pay, and profit/gain sharing. Understanding the specific processes and benefits of these types of short term incentives allows employers to choose which plan saves the company the most money in terms of productivity and reduction of turnover.

It is important for the HR department to be proficient in understanding the employee’s education, experiences and skills as the base pay is considered for positions. Base pay compensation is what the employees can expect to receive for the work provided for to the company; which could hourly rate of pay, salary basis, monthly or yearly. However; major incentives are also vital when encouraging employees become necessary. Employee incentives describe a system of rewarding success and effort in the workplace by allowing employees to earn prizes or recognition. The company will also offer additional base incentives for example, after working for the company ninety days healthcare benefits, and five years, stock options, profit sharing, an employee stock ownership plan (ESOP) will be implemented.,

It can be said that performance related pay has been motivating employees who works in companies/organisations from small to big, hence the distribution of bonuses definitely need to be taken into account. A bonus is an extra compensation given to an employee above his/her normal wage. A bonus also could be used as a reward for accomplishing specific goals set by the company, or for devotion to the company. However Performance related pay methods has broaden up into different topics, Individual-performance pay and group-performance pay being the most common methods. This essay will therefore discuss not only just identifying both distribution methods, but its relationship between one and another. Also, preferred ideals which

Several pay and reward strategies can be adopted by organisations. However, each of the strategies involves issues that must be considered as it could affect the employees and the organisation. Therefore, it is vital that each organisation implement and develop certain pay and reward strategies, which are aligned with its own business strategies. This will ensure that perspectives of employees, employers and the costs are all considered in the course of the application of each strategy. The aim of this essay is to explain and evaluate the main pay and reward strategies adopted by organisations as well as the benefits and disadvantages of each. Graded pay, broad-banding graded-pay, labour-market-related pay, performance related pay and total reward which includes financial and non-financial rewards will all be explained in detail and evaluated as well as the benefits and drawbacks of each.

The primary determinant of rate of pay is the kind of job an employee performs. Different job require different kinds and level of skills and these skills have varying levels of value to the organization. Typically, the higher the skill levels the higher the pay. Because, employees’ levels of skills tend to affect work efficiency and effectiveness. Many organizations have implemented skill-based pay systems which reward employees for their job skills and competencies they can demonstrate. In skill based pay system, an employee’s job title doesn’t define his or her pay category, skills do. The more skills a worker has, the higher the wage. Skill-based pay systems seems to mean nicely with the changing nature of jobs and the new world of work, Henderson (2004).

Secondly, it is an effective method of distinguishing good employees from the bad. By rewarding them accordingly, it sends the ¡¥right messages¡¦ to both types of workers, telling the good ones that the organisation thinks they are valuable and wants to keep them, and informing the bad ones that the organisation are happy to lose them. By sending the ¡¥right messages¡¦, it has a positive effect on the motivation of good employees, and forces the bad ones leave. Both effects are good for the organisation. (Kessler & Purcell, 1992)

Sometimes managers need to decide what kind of remuneration they have to use in order to motivate their subordinates to work harder, smarter or faster. As in my case I'm willing to work faster or harder if I know there is something I can gain with my behaviour and these thoughts almost everyone has. As their decision should be wise and fact based they need to know how the incentives they will use influence the motivation of the employees and when to use them. Mangers can decide whether to use individual or group incentives. If the individual incentive plans can't be implemented the group incentive plans take their place and vice versa. In this paper I would like to focus on group incentives and try to explain how the group

In this day and age, performance in the workplace is paramount and all businesses strive to improve it. Whether strong or weak, employee performance is determined by a variety of factors. Of these factors, workers ability, the environment they work in and the workers motivation play the most significant roles. But while ability can be trained and environment can be altered, motivation to do and to perform well is often difficult to capture. To address this, many businesses focus on remuneration in the hopes of improving employee satisfaction and motivation and often apply ‘variable performance-related pay’ (better known as

Incentive compensation is a form of compensation that is based solely on the performance of an employee. Payment is usually contingent upon performance of the company, the employee's department, the employee, or combinations thereof, hence the term “incentive”. What this means is the employee has an incentive to perform at a high level, and be rewarded for the effort. In most cases, incentive compensation plans are designed in such a way as to attract and retain key employees, identify with shareholders, and align interests of employees and the company. For example, in the United States, executives and employees are given incentive bonuses based on multiple performance measures. A typical plan for a executive employee can include: a base salary, annual bonus plan, stock options, and additional compensation such as long term incentive plans, retirement plans and restricted stock. Compensation plans often follow the net income and stock prices of the company.

The second objective of keeping employees by rewarding them by coming up with a performance based on the pay scheme translates to the employees being motivated to put extra efforts in their duties. Achieving an extra payment on top of their payment is the key aim of this strategy. The scheme of payment was made up of the base payment, merit pay and bonuses. Each of the workers in the organization gets a certain base payment awhile being in a position to earn