slide1 l.
Download
Skip this Video
Download Presentation
Dessler, Cole, and Sutherland Human Resources Management in Canada Canadian Eighth Edition

Loading in 2 Seconds...

play fullscreen
1 / 21

Dessler, Cole, and Sutherland Human Resources Management in Canada Canadian Eighth Edition - PowerPoint PPT Presentation


  • 195 Views
  • Uploaded on

Dessler, Cole, and Sutherland Human Resources Management in Canada Canadian Eighth Edition. 13. Chapter Thirteen Pay-for-Performance and Financial Incentives. © 2002 Pearson Education Canada Inc., Toronto, Ontario 13- 1. Money and Motivation: Background and Trends. Variable Pay

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Dessler, Cole, and Sutherland Human Resources Management in Canada Canadian Eighth Edition' - gracie


Download Now An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Dessler, Cole, and Sutherland

Human Resources Management in Canada

Canadian Eighth Edition

13

Chapter Thirteen

Pay-for-Performance and Financial Incentives

© 2002 Pearson Education Canada Inc., Toronto, Ontario 13-1

money and motivation background and trends
Money and Motivation:Background and Trends

Variable Pay

-plan that links pay to productivity or profitability

money and motivation background and trends3
Money and Motivation:Background and Trends

Types of Incentive Plans

-individual incentive programs

-group incentive programs

-profit sharing plans

-gainsharing plans

incentives for operations employees
Incentives for Operations Employees
  • Piecework plans – straight; guaranteed
  • Standard hour plan
  • Team or group incentive plan
incentives for managers and executives
Incentives for Managers and Executives

Short-term Incentives

annual bonus

  • Long-term Incentives
    • capital accumulation plans
incentives for managers and executives6
Incentives for Managers and Executives

Annual Bonus - Decisions

  • Eligibility
  • Fund size
  • Determining individual awards
incentives for managers and executives7
Incentives for Managers and Executives

Long-Term Incentives

  • Stock options
  • Book value plan
  • Stock appreciation rights
  • Performance achievement plan
  • Restricted stock plans
  • Phantom stock plans
  • Performance plans
incentives for salespeople
Incentives for Salespeople

Salary

Plan

(fixed salary)

Commission

Plan

(pay in direct

proportion

to sales)

Combination

Plan

(salary plus

commission)

incentives for other professionals
Incentives for Other Professionals

Merit Pay

Traditional Merit Pay Characteristics

-merit pay granted as higher base salary (a raise)

-usually based on individual performance only

New Merit Pay Characteristics

-merit pay awarded as lump sum once per year

(NOT a raise)

-merit pay tied to both individual and organizational

performance

incentives for other professionals10
Incentives for Other Professionals

Incentives for Professional Employees

-bonus represents small portion of total pay

-incentives based on results longer than one year

-up-to-date equipment and facilities

-supportive management style

-support for research publications

organization wide incentive plans
Organization-Wide Incentive Plans

-profit sharing plans

-employee share purchase/stock ownership plans

-Scanlon plans

-gainsharing plans

-at-risk variable pay plans

organization wide incentive plans12
Organization-Wide Incentive Plans

Basic Feature of Scanlon Plans (1 of 2)

Philosophy of Cooperation

-eliminate ‘us versus them’ attitudes

Identity

-company’s mission or purpose clearly articulated

Competence

-requires competence from all employees

organization wide incentive plans13
Organization-Wide Incentive Plans

Basic Feature of Scanlon Plans (2 of 2)

Involvement System

-departmental and executive-level committees

Sharing of Benefits Formula

-employees share directly in any extra profits

resulting from their cost-cutting suggestions

organization wide incentive plans14
Organization-Wide Incentive Plans

Gainsharing Plans – Success Factors

Cooperation between management and labour

Joint development of the plan

Effective communication

Clear guidelines regarding plan changes

Setting achievable goals

developing effective incentive plans
Developing Effective Incentive Plans

When to Use Incentives

-units of output can be measured

-clear relationship between employee effort

and quantity of output

-standardized job, regular workflow with

few/consistent delays

-quality less important than quantity

developing effective incentive plans16
Developing Effective Incentive Plans

Principles for Effective Implementation (1 of 2)

-pay for performance

-link incentives to career development and

challenging opportunities

-link incentives to measurable competencies

developing effective incentive plans17
Developing Effective Incentive Plans

Principles for Effective Implementation (2 of 2)

-match incentives to the culture of the organization

-keep group incentives clear and simple

-overcommunicate

-remember greatest incentive is the work itself

developing effective incentive plans18
Developing Effective Incentive Plans

Why Incentive Plans Don’t Work

  • Performance pay cannot replace good managers
  • Firms get what they pay for
  • Pay is not a motivator
  • Rewards can rupture relationships
  • Rewards may undermine responsiveness
  • Rewards can undermine interest and motivation
developing effective incentive plans19
Developing Effective Incentive Plans

Employee Recognition Programs

Lack of recognition and praise

is the #1 cause of

employee turnover

developing effective incentive plans20
Developing Effective Incentive Plans

Employee Recognition Programs

Objectives

-show support for employees

-enhance employees’ attitudes to the company

-enhance customer service

-increase loyalty

-increase productivity

developing effective incentive plans21
Developing Effective Incentive Plans

Employee Recognition Programs

Cost-effective -> praise and modest gifts

Important communication tool

ad