MHR 523 Lecture Notes - Lecture 10: Organizational Culture
2 Jul 2018
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Chapter 12: Pay for Performance and Financial Incentives
Incentives
Types of Incentive Plans
● Organization-wide
● Operations employees
● Senior managers and executives
● Salespeople
Developing Effective Incentive Plans
● Considerations
○ Performance pay cannot replace good management.
○ Firms get what they pay for.
○ Pay is not a motivator.
○ Rewards rupture relationships.
○ Rewards may undermine responsiveness.
Employee Implementation of Incentive Plans
1. Pay for performance.
2. Link incentives to activities that engage employees.
3. Link incentives to measurable, valuable competencies.
4. Match incentives to organizational culture
5. Keep group incentives clear and simple.
6. Over-communicate.
7. The greatest incentive is the work itself.
Employee Recognition Programs
● Emerging as a critical component of incentive plans.
● Traditionally, recognition has been for long service.
● Movement toward recognition throughout the career.
● Particularly effective in smaller entrepreneurial companies.
● Effective in achieving improved attitudes, increased workloads, and productivity.
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