Incentive Plans

“Incentives are the cornerstone of modern life”(Levitt and Dubner 12). Levitt and Dubner once mentioned in their book “Freakonomics”. According to Oxford dictionary, incentives are something tends to incite to action or greater effort, as a reward offered for increased productivity (“incentives”). In business field, incentives are something given by bosses to encourage their employees to endeavour in bringing benefits to their business. For a simple example, the employee who hits the monthly or year sales target will get cash or prizes as incentives. Apparently, these incentives are something that motivates employees maintains their great performance and also to motivate other employee, whoever wants to get the incentives, work harder.

Reward, whether it is financial (in terms of a monetary bonus) or simply praise and the recognition of success, will positively impact levels of motivation within a team. For example, a sales team working towards a target, that if achieved will mean a financial bonus will be more motivated than a team without this incentive, especially if a high percentage of that team have money as a primary motivating factor. The effect of praise and recognition on staff will be a team that feels valued and appreciated by its organisation. This will help promote harmony and make for a stronger, healthier and a more motivated team. A team that is not praised and recognised will soon start to feel that their hard work is not appreciated.

As a manager the three motivational methods that should be used would be to provide monetary incentives, employee recognition, and training incentives. Monetary incentives are one method that can be used by a leader or a manager in his or her workplace, these incentives is to reward an employee for his or her outrageous work-related performance. These incentives may include such as profit-sharing within the company, stock options, performance bonuses, and scheduled bonuses. These different types of monetary incentives can increase the motivation of its workers and can lead to more productive, less absenteeism, and may improve one’s quality of service. Monetary incentives when awarded to one employee may also be a morale booster can also encourage other workers to improve his or her work performance, and maintain a healthy, friendly, positive work environment. A healthy workplace is a product of a successful and productive work environment. Working in this kind of economy, monetary incentives is the excellent method to use. However, these incentives may persuade others and may not to some; the result will be the same, increased quality work

Every organization should have some type of incentive plan for staff. As previously mentioned, it is important to keep staff motivated to edify the success of an organization. Motivation and incentive concepts are closely linked because they both encourage staff to perform in a better way. The difference is that motivation can be words, but incentives are typically tangible and specific. According to the Houston Chronicle, incentive plans offer recognition and rewards to employees for meeting pre-established goals or objectives. This can include cash bonuses, profit sharing, additional paid vacation time or any range of prizes such as gift cards, corporate merchandise or other products or services (McQuerrey n.d.). Again, the objective is to motivate and to ensure its effectiveness the goal of the incentive program being offered must be clearly defined, viable and valuable for whatever the staff is being asked to do.

Have a one-on one meeting with the employees and leaders of the departments that are not meeting expectations to provide additional training, corrective actions, or otherwise work together with that particular team to develop a plan to improve, which would further empower the teams (Newstrom, 2015). For the teams who are meeting production goals in their department develop a rewards and recognition program so that the department or specific employees who have gone above and beyond could be recognized. This monthly awards and recognition program could replace the monthly financial bonus by providing another type of motivational and reward factor, which could be understood through the Equity Model, in which the employees would still see reward outcomes from their monthly inputs, in addition to the potential of a financial bonus (Newstrom,

The problem with most financial incentive plans is that they become an expectation, which means they are no longer motivating better performance but merely maintaining the status quo. Staff may come to view the additional cash as part of their normal compensation. They may even start depending on it. After the plan expires, morale (and results) can suffer as staff perceive that you took something away from them.

The sales department is the heart of every company. A company depends on the sales of their products. The success of the sales department is imperative to the continued growth of a company. In order for a sales department to experience success, the company must find new ways to motivate the employees on a continuous basis. An excellent way to motivate the employees is to provide incentive programs or total rewards programs. These incentive programs

The pay-for-performance incentive compensation program is designed to measure the variations of the healthcare professional performance, as well as motive them in improving the efficiency and the quality of care provided to patient by decreasing medical errors (Abduljawad & Al-Assaf, May 2011). Healthcare professional are given incentives based on good medical outcome and exceptional performance. It is an effective compensation program, because it improves retention, as well as attract new healthcare professionals to the organization; therefore, by giving healthcare professionals an incentive, they are more likely to remain engaged with their profession, because the feel satisfied with their work and that their skills and performance is valued

Managers and supervisor design compensation packages to promote team work and team building among co-workers. Managers also use incentives programs to entice recruitment of new candidates. The purpose of these incentive is to hire talented candidates through employment relation such as recruiting and selection, by shaping the flow of workers through performance evaluation, training, career advance, termination and labor relation (Martocchio, 2011).

Reward and recognition programs must connect the needs and expectations of the workforce with the company’s overall goals and strategies. A program that reinforces important company values and goals will encourage employees to act in line with such goals and emphasize the importance of achieving these goals. Alternatively, rewards which do not connect with organizational goals may convey a misleading message and encourage employees to act in a manner that does not facilitate the

1. Incentive compensation is a major practice that has continually been adopted by healthcare organizations, especially for managers. Most of these organizations use this tool as a means of rewarding employees financial for outstanding performance. Generally, incentive compensation involves the use of monetary reward for managers to attain specific established goals. Therefore, incentive compensation can be a motivational tool that benefits health care managers and the entire organization because it enables managers to achieve greater compensation while promoting organizational productivity. As the Chief Executive Officer of a hospital, I would design an incentive compensation program for my management team by aligning the financial rewards with business objectives and people costs. This will involve the use of a comprehensive approach that examines basic pay, health benefits, incentive opportunities, and retirement programs. The alignment of the compensation program is geared towards promoting organizational productivity and employee motivation.

When it comes to motivating employees, sometimes it’s a bigger task than it seems to be. Many companies need their employees to be motivated for many reasons, it could be to provide the best work for the company, or it could be to keep a senior level employee with the organization. Having a first hand look at how giving incentive pay to employees can increase motivation and work output, I believe this is key to providing a workplace that someone not only wants to be a part of, but looks forward to coming to. Incentive Pay can be broken down into three parts, why a company would give incentive pay in the first place, options for individual incentives, and the different group options. Incentive pay encourages hard work, and hard work brings success to all companies.

To motivate employees to work towards reaching organizational goals, managers frequently depend on some form of enticement. Beyond monetary compensation, awards and additional types of acknowledgment can be given, and the ability to choose a work schedule is a possibility. A reasonable pay system, which would be an incentive for individuals and groups to achieve organizational goals, is a hardship manager’s face (Jones & George, 2011). Within the company that I work for, every quarter awards are presented to Customer Service Agents who have maintained a 95 percent or above quality score. Monetary awards are given out as well as time off coupons.

Keeping employees motivated in addition to creating incentives and/or additional ways for employees to receive more compensation will create better performance overall within an organization. Contrary if company B gives their employees incentives to perform, without any motivational tactics they probably will not have as many top performances as company A, in addition the company may only seek short term rewards verses have long term success. Lack of motivation for employees within an organization, can cause long term damage for the company’s success. Different things motivate everyone; therefore there should be a system in place to keep employees motivated for the long term success of the company. In the MBM textbook under the concept of incentives, compensation, and motivation, there are a couple of different views of how it should be applied within an organization. We will discuss The Social Role of Profit, Personal Profit and Losses, and the way Market-Based Management view how incentives, compensation, and motivation should be applied and the things that effectively drive employees’ actions while at work.

Today, competition between the businesses is extremely high thus companies need to find ways to be competitive. Organizations prepare the best market strategy to increase the company performance and the ways to keep their employee motivation on the highest level to perform well within the competition. At that time, several incentive pay programs play an important role for every organization to perform well within the competition.