An incentive program is any organizational management program that is specifically meant to encourage or promote certain positive actions or behaviors by a group of people within an organization. The intention of promoting certain behavior is mainly to develop a work environment that supports the objectives and long-term goals of the organization (Mejia, Balkin, & Cardy, 2001). The behavior promotion action may be within a certain period of time or for an unlimited period of time. Incentive programs are common practices in business management for employee motivation and to attract customers. Scientifically, incentive programs are also referred to as pay for performance. The main types of incentive programs are points-based incentive programs, employee incentives, consumer incentives, dealer incentives, and sales incentive programs. All these incentive programs are aimed at triggering a type of motivation among the concerned parties. Organizations target specific people for liability purposes.
The main task covered in this paper is a pay for performance incentive award program for the employees of Pricks & Cleft Co. As the vice president of human resources of the organization, my task is to design and implement a pay for performance incentive program for all employees, including senior management. The key element that guides the design of the incentive program is that it might appear fair and equitable to all employees in addition to providing the required motivation for the organization to achieve its goals (Cooper, 2002). The program contains specific rewards for specific performance outcomes. The following is a pay for performance program for the employees of Pricks & Cleft Co. The following elements are contained in the employee incentive program.
Levels of Employees
Categorization of employees in different levels is the first factor of consideration when drafting an incentive program. Categorization of employees is based on their job description and the services that they offer to the organization. Therefore, there exist senior employees and junior employees. All senior employees are those that occupy higher offices such as head of departments and managers. The junior employees are comprised of the organization’s support staff and any other person that is ranked below the managers. Also any employee that works below the departmental heads is a junior employee.
The two main levels of employees include the executive and sales persons. The two levels of employees are expected to operate within the standards of operation that are stipulated in the main strategic design of the organization (Snell & Bohlander, 2013). There are expectations and goals for each level. For instance, the sales persons are expected to perform specific duties that are seldom reflected in their sales volume. There is encouragement to build customer relations for the purpose of improving sales. They are required to advice the organization on the trends of sales in the external markets. By advising the organization, the goals are to define and implement the most appropriate techniques of improving sales. Such instances are aimed at attracting new employees and maintaining the existing customers to improve sales volumes (Snell & Bohlander, 2013). By offering incentives to salespersons, an organization can greatly enhance their motivation and encourage them to invest more energy in their duties. It is intuitive to affirmatively postulate that salespersons are the cornerstone of a business because of their capabilities to attract many customers to purchase the organizations goods and services. The other expectation is that incentives will maintain the salespersons within the confines of the organization in a process of avoiding employee turnover.
The other category of employees entails the executive level. The executives are meant to create policies and implement them in order to safeguard the continuity of the organization in the process of achieving the organization’s goals (Snell & Bohlander, 2013). In most cases, organizations prefer motivating the executive team so that they can spread their leadership skills across all sections of the organization. The main goal of offering performance incentives to the executives is for the purpose of motivating them so that they can continue offering necessary strategic assistance in the quest of achieving the goals of the organization. Through the incentive programs, it is expected that the executive will work harder in terms of campaigning for incentives or for the wellness of the organization. Leadership is expected to hit the highest notch at all times if at all an organization desires to achieve its goals. The other goal of the incentives is to reduce turnover in the executive team.
Incentives for the Expectations
The specific incentives offered for improved attraction of customers and increase in sales is straight salary and straight commission. Specifically, commissions play key roles in motivating salespersons to invest more efforts in their area of specialization. For the executive level of employees, the expectation of offering appropriate ideas of strategic design to enhance performance attracts a large number of incentives. The main incentives for the executive employees include bonuses, performance incentive bonuses, executive perks, stock ownership, and profit sharing (Snell & Bohlander, 2013). Some of the lucrative executive perks include company car, chauffeur, spouse travel, loans, home computers, and executive easting facilities, among others. They are entitled of any one of the above incentives according to their performance standards.
Special Case Incentives
Special case incentives will be included in the program. These incentives will be used as a motivation to employees who report unethical misconduct such as sexual offenses and threats within the organization. Such behaviors are prohibited by the management of the organization. Therefore, any employee who reports such cases will be awarded monetary bonuses amounting to at least 5% of their total monthly salary and allowances.
Maintaining Equity and Fairness
In drafting an effective employee compensation program for the organization, the human resource department should consider specific factors that are aimed at maintain equity and fairness among the employees. For fairness purposes, employees should not take for granted the process of offering incentives (Snell & Bohlander, 2013). In most cases, the human resource development should ensure the process is conducted without the influence of external forces such as favoritism and corruption. To maintain the program’s fairness and equity, issues of discrimination will be eliminated. In this case, all employees are eligible to benefit from the incentives that the organization has to offer (Moore & Ross, 1983). The other step that the HR will take to maintain fairness and equity while offering the incentives is the management by walking around style. This style will enable the HR to monitor the activities of these employees over a certain period of time to avoid biasness in judgment of their performance. In real sense, the HR should be available to assess the employees and even obtain feedback from the other employees to support their overall judgment.
Dealing with Dissatisfaction
It is evident that a cluster of employees may not embrace the incentive program due to various reasons. Therefore, the HR should device specific ways of countering such occurrences. The most common causes of such rebellion should be established first. Some of the causes of such dissatisfaction instances include:
- The standards of production are unfair
- The incentive plans are only targeting work speed up plans
- Competition is created among employees due to compensation plans
- Tougher standards are associated with increased earning
- Friction between the management and employees arises as a result of the implementation of the incentive programs within an organization
` The HR will have to strategize on dealing with employees who oppose the incentive plans. Generally, the incentive programs or pay for performance programs are beneficial in achieving the goals of an organization (Ventrice, 2009). Therefore, the rebellious employees should be brought back and redirected into the mainstream of the company’s performance standards. The HR will: ensure that the employees have the desire for the programs; make sure that the employees understand the purpose of incentive programs; encourage the employees to particiapate; make the employees see the connection between their job performance and the incentives received; make the standards achievable although challenging; make the payout formula simple and easier to understand; and prove that payouts are distinct of compensation (Snell & Bohlander, 2013; Leverence, 1997). After making these observations and drawing clear lines between the purpose of the incentive programs and the indented outcomes of such incentives, the employees are likely to start embracing the proposal. Definitely, things can only work when everyone is comfortable with them. However, incentive programs are quite different. This is because everyone in the organization should support the program even though only a few of them are likely to benefit from the programs.
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