Concept and Brief Description
Incentive pay is tied to individual performance, profits, or other measures of success. Companies select forms of incentive pay to energize, direct, or control employees’ behavior. To be effective, incentive pay should encourage the kinds of behavior that are most needed, and employees must believe they have the ability t meet the performance standards. The employees must want the rewards, have the capabilities to reach the goals, and believe the pay plan is fair. Companies may recognize individual employees through incentives like piecework rates, standard hour plans, merit pay, sales commissions, and bonuses. Common group incentives are gainsharing, bonuses, and team awards. A balanced scorecard is a combination of performance measures directed toward the companies long term and short term goals.
Emotional Hook
Its one thing to incentivize sales production, but how far do you go? I've seen standards set so high that in order to achieve the top levels, you have to lie or commit fraud to get there. If you put the top guy on a pedestal, and everyone knows that he's dishonest, aren't you just encouraging your employees to be dishonest?
Key Points to Elicit in Discussion
Standard hour plans are how mechanics are compensated. If they finish a job early, its an extra bonus for being quick, not a punishment by paying them less.
Facilitative Questions
How can you tell when the standards you set for your employee's aren't achievable? How do you correct that?
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