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Incentive Plans Paper

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Incentive Plans Paper
Myra Callahan
University of Phoenix
MGT/431 Human Resources Management
Brad Bridges
March 6th, 2011

The organization’s incentive plans relate to organizational objective because of the involvement of the financial goals for the company. Objectives define strategies or implementation steps to attain the identified goals. Unlike goals, objectives are specific, measurable, and have a defined completion date. They are more specific and outline the “who, what, when, where, and how” of reaching the goals. The development of the objectives will be to help achieve goals by dividing them into manageable components (Workforce Development, 2009). Therefore, the objectives and incentive plans go hand in hand.
Incentive Plans Incentive plans are not successful when it is extremely broad and is not created for the employees or staff members. There is a saying, “all for one and one for all,” that is no longer effectively accepted into the business world. It definitely discourages those trying their best in their job performances. This certain style of increase sharing is like an entitlement. Being that some employees slack in their performances, the productive employees will reject that style of incentives. Everyone must have a clear understanding of the incentive compensation and how it connects to his or her effort. A well thought out compensation plan will push each department or individual to stay focus on the thing in which he or she can control. The best plans encourage the behaviors of others to aim for successful results. An incentive plan should include some realistic approaches for a job well done, short-term rewards for performance over a month or quarter, and long-term rewards for being a loyal employee over the years. Also placing them in categories is an easier way to reach employees from different perspectives. Those who seek immediate satisfaction will obtain it and those that seek long-term will be satisfied as well.
Rewards for Business Goals and Individual Effort Incentive plans will launch right after average performance is exceeded. This means that management must explain clearly what is expected and the rewards that will follow. Employees must understand the meaning of average performance and the duties to perform to reach the company’s basic business goals and gain incentives. To catch employees performing well and make sure everyone in the work area sees and hears the recognition that will be a great boost for motivation. If a players club representative did a great job handling a dual account, openly give him or her immediate praise, recognition, and a reward. This way the others will know that they are appreciated for the extra effort they put in. This is one aspect of the first category of employees’ incentives.
Encourage Team Results and Be Creative In every workplace they company need to establish a fair amount of teamwork. In an effective plan, performance results are also documented and rewarded based on unit or department results. Keeping up with individual performance can become chaotic, therefore this is a great way to compromise between rewarding individual effort and excellent company results (such as total growth in sales). This will also help when being creative. Today’s employees look far and beyond money for other rewards, especially at a casino. They are looking for challenges, recognition, and empowerment. Non-cash recognition awards are very effective in reinforcing the company’s values. For instance, those who shows outstanding customer service skills will receive special awards. One way is for employees to be nominated as the top performer of the month. Management needs to think about the types of awards that make sense for employees.
Long-Term Incentives A good plan will allow employees to earn incentives monthly or quarterly. A great plan will add in a long-term reward system. Think of long-term incentives as a house of diamonds nothing but shine in the business. Employees who build up a nice representation as a go getter will think twice before leaving for a small salary if they have to forfeit incentive gains. A plan that would be very fair is a non-qualified deferred compensation plan based on profit sharing. The employee will earn a certain amount of compensation based on company profitability annually. The payment is deferred until a few years down the road or the retirement of the employee. Another approach is the use of stock appreciation rights. Again, the employee cannot access this deferred compensation for several years or until retirement. In some cases it may make sense actually to provide great long-term and key employees with actual stock equity in the firm. In conclusion the employee incentive programs are a very powerful concept when employees can understand and see the connection between their performance and their rewards. Keep in mind that human nature is such that the long-term rewards are often forgotten or discounted by employees, unless regular reminders are presented to them. A great plan can help transform a company from an average performer meaning people come to work to do their job and get paid or into one where excellence and outstanding results are the goals.

References:
Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M., (2007). Fundamentals of human resources management (2nd Ed.). New York, NY: McGraw-Hill/Irwin
Define Organizational Objectives- Workforce Development Definitions (2009). Retrieved on March 6th, 2011 from www.admin.state.nh.us/hr/documents/WorkforceDevelopment

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