ADMS 2600 Chapter Notes - Chapter 10: Piece Work, Job Performance, Standard Streams

• School: York University
• Department: Administrative Studies
• Course: ADMS 2600
• Professor: Paul Fairlie

Document Summary

A major element of strategic compensation management is the use of incentive plans called variable pay programs, for employee throughout the organization: variable pay tying pay to some measure of individual, group, or organizational performance. Incentive pay is based entirely on a pay-for performance philosophy. Incentive pay programs establish a performance threshold that an employee must reach to qualify for incentive payments. Incentive plans emphasise a shared focus on organizational objectives by broadening the opportunities for incentives to employees throughout the organization. Incentive plans create an operating environment that champions a philosophy of shared commitment though the belief that every individual contributes to organizational performance and success. Arguers for incentive plans focus on linking compensation rewards, both individual and group, to organization strategy and goals: specific goals could be lower labour costs, customer satisfaction, etc. By meshing compensation and organizational objectives, managers believe that employees will assume ownership of their job, thereby improving their effort and overall job performance.