Which of the following is true about the level of risk involved with incentive pay? It depends on the extent to which employees control the attainment of a desired goal.
There are six main types of incentive pay plans: One-time bonuses, profit-sharing, shares of stock, retention, non-financial recognition and career development.
Terms in this set (37)Individual- Incentive Plans.Group- Incentive Plans.Company-incentive Plans.
Incentive Pay Definition. Incentive pay is performance-based compensation that rewards an employee for meeting set goals or objectives. This compensation can come in the form of money, stocks, additional paid leave, gifts, etc.
Types of Incentive Pay:Cash, including commission, year-end bonuses, sign-on bonuses, and performance bonuses.Shares or company stock options.A company car.Paid holidays.Gifts or vouchers.Health club membership.
In the survey, 74 percent of respondents said their organization's annual incentive plan was “moderate to effective” in achieving its objective. That rating, along with the increase in the use of incentives, shows that compensation professionals find them successful.
The kinds of incentive pay fall into three broad categories:Incentives linked to individual.Group.Organizational Performance.
Measurable Results The key objective of any incentive plan is to drive performance to achieve desired results. For the plan to be successful, results must be measurable with clear indicators and this begins with an effective goal setting framework.
The six common types of incentive plan are cash bonuses, profit-share, shares of stock, retention bonuses, training and non-financial recognition.
Incentives increase performance by boosting the value people assign to work goals, causing them to make stronger commitments to those goals and achieve them. The program has to provide the meaning, rewards, communication, and support that foster a sense of value.
Rather than focusing on more intrinsic forces behind motivation, the incentive theory proposes that people are pulled toward behaviors that lead to rewards and pushed away from actions that might lead to negative consequences.
When it comes to employees, rewards and incentives in the workplace have benefits for both employees and employers. When recognising employees for their performance and productivity, it can improve morale, job satisfaction and motivation to support organisations in achieving their aims.