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Video instructions and help with filling out and completing When 8850 Form Incentives

Instructions and Help about When 8850 Form Incentives

Today we will discuss some of the different incentive plans organizations can use for individual employees salespeople executives and managers as well as some organization wide plans we will not talk about any of the motivation theories discussed in your textbook so be sure to read about them in Chapter 12 in order to have an idea of how incentives work we need to spend some time discussing what motivates people what motivates you to do things not just in work but in all of the things you do is it money or flexibility in your schedule everyone is different and it is important to note that no single motivation technique will work for every employee incentives are financial rewards above and beyond regular salary Frederick Taylor popularized the theory of scientific management and the use of financial incentives in the late 1800s he believed employees engaged in something known as systematic soldiering the tendency of employees to work at the slowest pace possible and to produce at the minimum acceptable level he believed by providing financial incentives you could motivate people to work harder what he did not take into account in which we now know is the law of individual differences which says people differ in personality abilities values and needs thus people react to different incentives in different ways managers should be aware of employee needs and fine-tune the incentives offered to meet their needs they should also keep in mind that money is not the only motivator here are the results of a research study that shows the breakdown of the type of incentives most preferred by employees as you can see a large majority of employees enjoy travel and would love to have their employer fund a vacation for them however not all organizations can afford to do something of this magnitude especially small businesses there are many different types of incentive plans and we will briefly discuss each one beginning with individual incentives there are two main types of individual incentive plans piece work plans and merit pay the first individual incentive piece work is paying the worker a sum or piece rate for each unit he or she produces there are several pros and cons of piece work one example of an advantage is that the plan is easily understood however there can be problems with the quality of the product produced if the incentive is based only the number of units created the other individual incentive merit pay is a permanent cumulative salary increase the firm awards to an individual employee the raise can be based on the individuals performance alone or on a combination of both individual and organizational performance here is an example of a merit pay program that is based 50% on individual performance and 50% on organizational performance you can see that if both the individual and the company have outstanding performance then the employee will receive all of the merit pay and if the employees performance is good but the company's performance is only marginal then 50% of the total raise is granted when considering incentives for professional employees the options become more diverse things such as bonuses better pension plans etc can be used organizations can also use recognition based rewards studies show that recognition has a positive impact on performance either alone or in conjunction with financial rewards combining financial rewards with non-financial ones produced performance improvements almost twice that of using each reward alone also many organizations are using what is known as online reward programs to customize their incentive plans online reward programs are internet sites that have a much broader range of products than most employers could offer employees build up points and then can pick and choose what reward is most important to them this customized ability makes it much easier to bestow and deliver rewards now we should discuss incentives for salespeople organizations that employ salespeople have to use different types of incentives they can use a straight salary plan which makes it simple to switch territories or reassign individuals however it can constrict sales and demotivate high performers because there is no reward for selling more another option is the commissioned plan this plan pays salespeople for results and only for results thus they tend to attract high performing salespeople who see that effort clearly leads to rewards but it may cause them to neglect non-selling duties like servicing small accounts or cultivating dedicated customers one last option is the combination plan most companies pay salespeople a combination of salary and commissions combination plans give salespeople a floor to their earnings and still provide an incentive for superior performance we also need to discuss incentives for teams for most human scent of plans a production standard must be set for a specific work group the members are paid incentives if the group exceeds the production standard what is most important to remember about team incentives is that you want the individuals to work as a team therefore they must be rewarded as a team if you put people into teams but reward individual performance then the team will never really work because each person will be concerned about their own performance and not necessarily the performance of the group businesses must high rewards - goals based on an overall standard of group performance while individual and team incentives are important organizations can also create company-wide incentive plans one option is the profit sharing plan profit sharing involves employees receiving a share of the company's annual profits in other words the company takes a designated portion of the profits and divides it among its employees another option is the employee stock ownership plan here a firm purchases shares of its stock for employees so when the organization succeeds employees are rewarded because the value of the stock increases yet another option known as a gain sharing plan is an incentive that engages some or all employees in a common.

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