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Benefits and Services

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1. Explain how you would apply four motivation theories in formulating an incentive plan.

2. Discuss the main incentives for individual employees.

3. Discuss the pros and cons of commissions versus straight pay for salespeople.

4. Describe the main incentives for managers and executives.

5. Name and describe the most popular organization-wide incentive plans.

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Learning Objectives

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Explain how you would apply four motivation theories in

formulating an incentive plan.

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Money and Motivation

Strategy

Performance

Incentive Pay

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Motivation and Incentives

Herzberg’s

Two-Factory

Theory

Deci and

demotivators

Hygiene

Motivators

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• Expectancy

Theory, Victor

Vroom

Motivation and Incentives

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o Behavior modificationo Incentive pay terminologyo Employee incentives and the law

Motivation and Incentives

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• Money and motivation• Motivation theories• Incentives• Terminology• The law

Review

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Discuss the main incentives for individual

employees.

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Individual Employee Incentive and Recognition Programs

• Piecework planso Straight

pieceworko Standard hour

planso Pros and cons

• Merit pay as an

incentiveo Differential pay

increaseso Merit pay options

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• Incentives for professional employees• Nonfinancial and recognition-based

awardso Incentives managers can use

• Online and apps supported awards• Job design

Individual Employee Incentive and Recognition Programs

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IMPROVING PERFORMANCE: HR Tools for Line Managers and Entrepreneurs

For motivation:

1. Employees need a doable goal and agree

with it

2. Recognition either alone or in combination

with financial rewards

3. Social recognition (such as compliments)

as positive reinforcement on a day-to-day

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IMPROVING PERFORMANCE: HR as a Profit Center

Research:• Performance was compared in stores using

and not using financial and nonfinancial incentives

• Measured gross profitability, drive-through time, and employee turnover

• Financial and nonfinancial incentives improved employee and store performance

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• Piecework• Merit pay• Incentives for professionals• Nonfinancial rewards• Online• Job design

Review

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Discuss the pros and cons of commissions

versus straight pay for salespeople.

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• Salary plan• Commission plan• Combination plan• Maximizing sales force results• How effective are your

incentives?

Incentives for Salespeople

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Improving Performance Through HRIS: How Effective Are Your Incentives?

• With the aid of VUE Compensation

Management® the sales manager can

analyze compensation and performance

data, conduct “what-if” analyses and

reports, and conduct trend analyses.

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• Types of sales

incentives• Maximizing results• Effectiveness

Review

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Describe the main incentives for managers

and executives.

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• Strategy and the executive’s long-term and total rewards package

• Sarbanes-Oxley Act• Short-term incentives, annual bonus

o Eligibilityo Fund sizeo Individual performanceo Formula

Incentives for Managers and Executives

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Incentives for Managers and Executives

• Strategic long-term incentiveso Stock optionso Stock option problemso Other stock planso Ethics and incentives

• Other executive incentives

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IMPROVING PERFORMANCE: HR Practices Around the Globe

• Chinese companies studied to determine if new incentive plans affected company performance

• Researchers compared performance of those with management stock-option plans and a control group without plans

• Differences found between private and government controlled companies

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• Strategy and long-term incentives• Federal law• Short-term incentives• Strategic long-term incentives• Other incentives

Review

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Name and describe the most popular

organization-wide incentive plans.

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• Designing team incentiveso Engineered standardso Pros and cons

• HR inequities that undercut team

incentives

Team and Organization-Wide Incentive Plans

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Team and Organization-Wide Incentive Plans

• Profit-sharing plans• Scanlon plans• Other gain-sharing plans• At-risk pay plans• Employee stock ownership plansBroad based

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Incentive Plans in Practice: Nucor

• The production incentive plan at Nucor steel also has a:o Department manager incentive plano Professional and clerical bonus

plano Senior officer incentive plan

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• Team incentives• Inequities• Profit-sharing• Scanlon and gain-sharing• At-risk• ESOPs

Review

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Improving Performance at The Hotel Paris

• Do you agree with the measurable criteria Lisa set for the new incentive plan?

• Given what you know about the Hotel Paris’s strategic goals, list specific behaviors you would incentivize for front-desk clerks, hotel managers, valets and housekeepers.

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Hotel ParisStrategy Chapter 12

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