HRM 2600 Chapter Notes - Chapter 10: Merit Pay
18 Oct 2011
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Document Summary
Incentive rewards are based entirely upon a pay-for-performance philosophy. Establish a performance threshold" (a baseline performance level) that an employee or group of employees must reach in order to qualify for incentive pay. Types of individual/group and organizational level incentive plans. Gainsharing plans plans where both employee and organization share the gains from increased productivity and profitability. Give a company an idea to save ,000 and they do save that amount, the company splits it - ,000 for them, ,000 for employees. Merit pay = annual increase: links employee pay to established performance standards, companies don"t have to but need to, to keep up with inflation. Average = 3% - hr looks at consumer price index measures of change in goods and services, year over year. When deciding annual increase, hr looks at: cpi, profit, competition, what unions are paying in same industry. When getting an increase, it matters what the increase is, in relation to inflation.
