business executive
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.
ThinkExist. (n.d.). Jack Welch quotes. Retrieved from http://thinkexist.com/quotes/
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
As long as commerce exists, different forms of incentives pay exist to motivate employees, resulting in improved business outcomes. In this arena, indeed, incentive pay works well, with an incentive for increased sales being the most obvious as many employees work hard to gain income and not because they love their job (Martocchio, 2020). For instance, in a bank, an employee who opens bank accounts is paid through incentives. In this case, the employee would want to talk to as many people as possible to open bank accounts, benefiting both the employee and the bank. Incentive pays increases productivity. For example, in a shoe manufacturing company, an employee will work hard to meet the target to get bonuses helping the company produce a lot of shoes hence sales.
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