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1- What is group or team incentive plan? What are their pros and cons?
Team working these days is one of the important concepts to achieve the target in some job, most of the leaders pay attention more to this behavior ant they set their system to increase performance with organization behaviors concept in company and know that they cant get a good result individually.
To increase productivity and performance in terms of team working, the managers should focus on motivating team members to do the best way, the incentive plan for team and group try to encourage and persuade the members for getting more performance in different situations, in the other hand team or group incentive plan is a sort of paying for groups members instead of exceeding the production standard.
There are three ways to calculate team incentive payment; one of these is setting a standard measure for groups performance and calculates each members output, in this method members will gave incentive amount in three different bases, first all members will be earned by the highest producer, second all the members receive by the lowest producer and the last, all the member receive equal to the average pay earned by the group.
The second method is setting incentive plan by engineered production standard based on the output of the group as a whole, all member will be receive same amount based on pieces rate for groups job (this method can be use piece rate or standard hour plan)
Finally the third method is to tie reward to targets based on some overall standard of group performance, such as total labor hours per final product.
The pros and cons of team incentive plan:
As I mention above much work today is organized around team and group, and we cant achieve high performance just individual, team incentive plan reinforce participation soul in group and help to solve groups problems and increase motivation between the worker and they can rely on each other in tough situation, team incentive also help to increase knowledge and skills during the work because each member try to trained others.
But sometimes team incentive plan is not suitable for each individual members and cause discourage hard workers when they compare themselves with others, maybe they dont put their heart into the effort.
The solution is established some kind of team members commit to basing pay on individual performance not just team.
2- Why incentive plan fail and how can you make an effective incentive plan?
As we mentioned about incentive plan, the main purpose of this plan is increase productivity and performance with some monetary awards for individual or team work to motivate the employees in their job, because of incentive plan basis we have some problem during the process that cause it will be failed. In this part we will explain some reasons about the matters of failing incentive plan briefly.
Incentive plan is not a suitable concept to cover the lack of management, for instant there are some other important factors to achieve high performance like training, much time for vacation, working tools, complete insurance
When the main workers purposes is high achieve the target to get incentive like higher product, they wont pay attention to other factors like quality of product, using correct method to produce, or some times they will manipulate the schedule for completing tasks or even engage in patently unethical and illegal behavior. When the employees purpose is money or monetary incentive plan, the corporation soul will be decrease and each employee tries to achieve his target without any attention to team working or group goal.
Some times the incentive plan will be failed if the target or main purpose of company is farm from the employees abilities or it is unclear tasks. Incentive plan can be mediate against change and responsiveness.
To make an effective incentive plan we must pay attention to some matters:
Sometimes incentive plan cant be effective because the employee doesnt have any related to companys purpose, for example when high quantity is target and the product would be produce in product line, employees cant control the quantity of product.
The link between incentive plan and the companys strategies is important to have effective incentive; we should decide how the incentive plan will contribute to implementing the firms strategy or objectives and we must make sure the incentive plan reward employees in the direct proportion to increase performance, but in this part employees must believe that they can do the task and managers can make it easy and clear and have to prepare necessary tools, equipment and training.
To have effective incentive plan we should define standard for employees that employees with achieving 60% or 70% will be success, not 100%. Maybe in the other part of incentive plan we want to decrease payment, before that we must inform employees about new standard and during this process leader should support the employees to get the goal and the process used to appraisal performance must be fair and clear.
Always managers must looking for a new kind of incentive plan, in this idea manager can be creative to decrease the effect of lack of employees skill, boring job, unfair supervisor and environment problems.
3- In a competitive globalize business environment, why do you think employers implement the pay for performance incentives plan rather than the traditional compensation?
Firms are successful when they exercise an advantage over their competition. Generally this is accomplished along the lines of product or process innovation, improved quality, or reduced costs. An important aspect of creating any such competitive advantage is the strategic management of a firms human resources (HR). The increasing internationalization of previously protected national markets has brought new opportunities and new threats to firms with workplaces in the developed world making the internal workforce ever more important.
As a consequence business leaders are looking for new ways to develop their competitive advantage to better suit the internationalizing marketplace. On a global scale, workplaces have a natural competitive advantage in the availability of a highly skilled labor force; in the other hands the main core competency in each company to achieve the targets