ADM 2337 Lecture Notes - Lecture 10: Merit Pay, Lump Sum, Piece Work
16 Mar 2016
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Document Summary
A major element of strategic compensaion management is the use of incenive plans, also called variable pay programs, for employees throughout the organizaion: variable pay is trying to pay to some measure of individual, group or organizaion performance. Incenive pay programs establish performance threshold that an employer or group of employees must reach to qualify for incenive payments. By meshing compensaion and organizaional objecives, manager believe that employees will assume ownership of their jobs, thereby improving their eforts and overall job performance. Incenives are designed to encourage employees to put out more efort to complete their job tasks. The degree of success obtained depends on several factors: idenifying important organizaional metrics by which to measure employee performance, a customized incenive plan that efecively measures employee output and rewards excepional employee performance. For an incenive plan to succeed, employees must have some desire for the plan.
