Personeel Management chapter

Working Individually or in groups, Identify the factors for a successful Incentive plan. For an Incentive plan to succeed, employees must have some desire for the plan. This desire can be influenced in part by how successful management is in introducing plan and convincing employees of its benefits. Encouraging employees to participate In developing and administering the plan is likely to increase their willingness accept It.
Compensation specialists also note the following as heartsickness of a successful incentive plan: Financial incentives are linked to valued behavior, the incentive program seems fair to employees, productivity/quality standards are challenging but achievable, and payout formulas are simple and understandable. 2; Contrast the differences between straight piecework, differential piece rate, and standard hour plans. Explain where each plan might best be used. Straight Piecework: One of the oldest incentive plans is based on piecework.
Under straight piecework, employees receive a certain rate for each unit produced. Their insemination is determined by the number of units they produce during a pay period. At Staircase, an office furniture maker, employees can earn more than their base pay, often as much as 35 percent more, through piecework for each slab of metal they cut or chair they upholster. Under a differential piece rate, employees whose production exceeds the standard output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard.

Computing price rate: Although time standards establish the time required to perform a given amount f work, they do not by themselves determine what the incentive rate should be. The incentive rates must be based on hourly wage rates that would otherwise be paid for the type of work being performed. (standard time per unit) (Hourly rate) (units per hour) (Minutes per hour) = units per hour = per unit Standard hour plan: Another common incentive technique is the standard hour plan, which sets incentive rates on the basis of a predetermined “standard time” for completing a Job.
If employees finish the work In less than the expected time, their pay Is still based on the standard time for the Job multiplied by their hourly rate. For example, if the standard time to install an engine in a half-ton truck is five hours and 1 OFF mechanic’s hourly rate times five hours. Standard hour plans are particularly suited to long-cycle operations or Jobs or tasks that are non-repetitive and require a variety of skills. 3; A frequently heard complaint about merit raises is that they do little to increase employee effort.
What are the causes of this belief? Suggest ways in which the motivating value of merit raises may be increased. No easy solutions to these problems, organizations using a true merit pay plan often base the percentage pay ease on merit guidelines tied to performance appraisals. For example, Highlights in HARM 3 illustrates a guideline chart for awarding merit raises. The percentages may change each year, depending on various internal or external concerns such as profit levels or national economic conditions as indicated by changes in the consumer price index.
Under the illustrated merit plan, to prevent all employees from being rated outstanding or above average, managers may be required to distribute the performance rating according to some pre-established formula (such as only 10 percent can be rated outstanding). Additionally, when setting merit percentage guidelines, organizations should consider individual performance along with such factors as training, experience, and current earnings. 4; what are the reasons behind the different payment methods for sales employees?
The reason behind different payment methods for sales employees is that not every company shares exactly the same standards of measuring sales performance. From my point of view, the best method would be the combined salary and commission plan and it will be also the most useful. As its name says, it is made by two different plans, combined salary and omission plan, this obviously represents an advantage. It also offers some flexibility, allowing to the employees to receive bonuses and commission to certain sales periods. With this extra compensation, employees will keep their work up in order to get bonuses and incentives. ; Because of competitive forces within your industry, you have decided to implement a profit-sharing plan for your employees. Discuss the advantages of profit sharing and identify specific characteristics that will assure success for your plan. Profit-sharing plans differ in the proportion of profits shared with employees and in the distribution and form of payment. The amount shared with employees may range from 5 to 50 percent of the net profit. In most plans, however, about 20 to 25 percent of the net profit is shared.
Profit distributions may be made to all employees on an equal basis, or they may be based on regular salaries or some formula that takes into account seniority and/or merit. The payments may be disbursed in cash, deferred, or made on the basis of combining the two forms of payments. 7; what are some of the reasons for the rapid growth of Seeps? Cite some of the potential problems concerning their use. The first advantage is that Seeps increase inconsiderable tax benefits and tax incentives; it also helps a lot in the retirement benefits for the workers avoiding taxation cuts.