12 Pay for Performance
and Financial Incentives
4-
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Ltd.
Learning Objectives
12-1 Explain how you would apply four
motivation theories in formulating an
incentive plan.
12-2. Discuss the main
4- incentives for
individual employees.
12-3. Discuss the pros and cons of
commissions versus straight pay for
salespeople.
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Learning Objectives
12-4. Describe the main incentives for
managers and executives.
12-5 Name and describe the most popular
organization-wide incentive
4- plans.
12-6 Explain how to use incentives to
improve employee engagement.
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I.
Explain how you would apply
four motivation
4-
theories in
formulating an incentive plan.
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Money and Motivation
Fair Day’s Work
4-
Scientific Management
Movement
Incentive Pay
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Incentive Pay Terminology
• Pay-for Performance
• Variable Pay 4-
• Profit Sharing
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Linking Strategy, Performance, and
Incentive Pay
4-
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Motivation and Incentives
Theories that have relevance to designing
incentive plans
• Motivators and Fredrick Herzberg
4-
• Demotivators and Edward Deci
• Expectancy Theory and Victory Vroom
• Behavior Modification / Reinforcement and
B.F. Skinner
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Know Your Employment Law
Employee Incentives
and the Law
4-
Let’s take a look…
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II.
Discuss the main
incentives for
4-
individual
employees.
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Individual Employee Incentive and
Recognition Programs
• Piecework plans
o Straight
4-
piecework
o Standard hour
plans
o Pros and Cons
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Merit Pay as an Incentive
• Merit pay as an
incentive
o Differential pay 4-
increases
o Merit pay
options
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Incentive for Professional
Employees
4-
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Non-financial and
Recognition-Base Awards
• Social Recognition
4-
• Performance
Feedback
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Trends Shaping HR:
Digital and Social Media
Recognition Programs
4-
Let’s take a look…
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Improving Performance: HR Tools for Line
Managers and Small Businesses
Financial Incentives for
Motivation
4-
Let’s talk about it…
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List of Recognition
4-
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Job Design
4-
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Improving Performance:
The Strategic Context
The Fast-Food Chain
4-
Let’s talk about it…
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III.
Discuss the pros and
cons of commissions
4-
versus straight pay for
salespeople.
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Incentives for Salespeople
1. Align how to measure
and reward
2. Align with Strategic
4-
Goals
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Types of Sales Incentive Plans
1. Salary plan
2. Commission plan
3. Combination plan 4-
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Maximizing Sales Force Results
• Set Effective Quotas
• Distinguish Among Performers
4-
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Sales Incentives in Action
4-
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Trends Shaping HR:
Digital and Social Media
Commission Sales
4-
Let’s take a look…
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IV.
Describe the main
incentives for managers
4-
and executives.
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Incentives for Managers and
Executives
• Short-term Incentives
• Long-term incentives
4-
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Strategy and the Executive’s Long-Term
and Total Rewards Package
• Sarbanes-Oxley Act
• Short-term incentives and the Annual
bonus
4-
o Eligibility
o Fund size
o Individual awards
o Stock options
o Ethics
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Improving Performance:
HR Practices Around the Globe
International HR – Stock
options
4-
Let’s talk about it…
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Some Other Executive
Incentives
4-
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V.
Name and describe the
most popular organization-
wide incentive plans.
4-
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Team and Organization-Wide
Incentive Plans
• How Designing Team Incentives
• Evidence-Based HR: Inequities That
Undercut Team Incentives
4-
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Organizational – Wide Plans
• Profit-sharing plans
• Scanlon plans
4-
• Other Gainsharing Plans
• At-Risk Pay Plans
• Employee Stock Ownership Plans
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Team and Organization-
Wide Incentive Plans
• Profit-sharing plans
• Scanlon plans
4-
• Other gain-sharing plans
• At-risk pay plans
• Employee stock ownership plans
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Incentive Plans in Practice:
Nucor
• The production incentive plan at Nucor
steel also has a:
o Department manager
4- incentive plan
o Professional and clerical bonus plan
o Senior officer incentive plan
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V.
Explain how to use
incentives to improve
employee engagement.
4-
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Ltd.
Employee Engagement Guide for
Managers
• Incentives and Engagement
Measure the extent to which supervisors are
encouraging their subordinates
4- to be engaged
Use incentives to reward supervisors for
improving employee engagement
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Chapter 12 Review
What you should now know….
4-
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