Incentive Plan

When considering an incentive plan, the companies intent is to reward employees for their performance. The dilemma is determining which plan would best meet an organization's needs. First, an incentive plan that is well-designed can assist a company in meeting objectives by improving quality, customer service, and productivity. To be successful, the plan must appropriately address the company objectives and include measurable, realistic, and attainable goals. Next, Sally is debating between the team-based incentive plan and the individual incentive plan as a rewards program for employees. The furniture company generates revenue from sales, which includes excellent delivery services that are an attractive feature to customers. This trait of …show more content…
Individual incentive pay plans offer a promise of pay for a specific pre-established level of performance, related to an objective. For instance, offering employees incentives for improving accuracy and speed in processing orders. The type of incentive would be determined by the company; however, in this scenario, a financial incentive would likely be best.
All incentive plans have a common feature of establishing a standard that compares individual performance of workers to determine an incentive plan based on the magnitude of those objectives. Now, being that the furniture is built on site and the company prides itself on the efficiency of work, developing objective individual measures should not be an issue.
As with all techniques and processes, there are advantages and disadvantages. One advantage of choosing the individual incentive pay plan is the decreased need to provide direct supervision to ensure that reasonable levels of output are maintained. Second, the impact of the incentive would increase productivity, increase the wages of employees, and decrease production costs. Third, with a more stable method of measuring productivity, projecting budget and labor costs are more