Generally, traditional pay structures involve annual salary or hourly rates with raises based on seniority or merit. This week, you review some alternative approaches, including incentive pay and person-focused pay. Your assessment of incentive-based pay includes individual incentive plans, group incentive plans, and company-wide incentive plans.
Although incentive-based pay is linked to performance, person-focused plans focus on competencies. Martocchio (2020) states that “a competency refers to an individual’s capability to orchestrate and apply combinations of knowledge and skills consistently over time to perform work successfully in the required work situations” (p. 111).
Today your manager, Megan, calls you in for a progress report and suggests you research incentive-based pay and person-focused plans. You explain that you are taking a strategic approach and that a total rewards plan is not a “one size fits all” concept. Your assure her your analysis will include the positives and negatives of each approach, as well as recommendations for evaluation, in the creation of the final proposal.
References
Martocchio, J. J. (2020). Strategic compensation: A human resource management approach (10th ed.). Hoboken, NJ: Pearson.
Does incentive pay work? Provide your analysis as you respond to the following:
Provide at least two examples (types of jobs) where individual incentive might be appropriate.
Provide at least two examples (types of jobs) where group incentive might be appropriate.
Your initial post should be succinct, of at least 150 words, and demonstrate critical analysis and precision in writing. Evaluate the week’s materials and reference relevant trade publications and scholarly literature.
Requirements: 150
Answer preview
Group incentives improve a company’s production as well as employees morale. For instance, in a sales company, incentives are given to the best performing department whereby departments will be working hard to compete, which improves the company’s performance and growth. Group incentives drive all team members to hold themselves accountable for the team’s success, hence fostering communication. For example, a company that deals with advertisements and logo creation can be paid incentives depending on the group that launches the best advert. That enables employees to research more, communicate more and work even harder.
