How Does The Incentive?

Google+ Pinterest LinkedIn Tumblr +

.This view is confirmed by academic research, but in practice systems Premiums are widely used. A carefully designed system of bonuses when implemented on top of best management practices in a well-run is a useful management tool – but not a substitute for these things.

How to design an incentive plan

– Incentive plans can be implemented at individual, team or organization or use a combination of these

– Make sure that the rewards to encourage the behavior you want, are linked to employee performance and match can affect the motivation of the employees affected (may not be financial). For some members of staff will not be possible to link performance directly to financial outcomes (eg, a customer table)

– Understanding that as circumstances change all the incentive schemes will have unexpected and often unwanted side effects

– Make sure you can afford all possible outcomes

– The maximum bonus should be enough to recognize more than performance, but restricted in terms of total revenues – up to 50% of basic salary, usually much less

– List individual performance bonuses global company that is an obstacle overall profitability must be achieved before paying performance-related individual department util starts down this is the fact that a good performance might not get what they deserve, but at least it avoids the situation where he can not afford to pay

– Bonus payments should be self-financing in the bonus period, ie, that should be more than covered by the benefits provided to improve achievement, triggering the bonus payment

– Ensure that the basic objectives and bond business plan and budget

– Link the bonus payments for benefits no turnover – and the cap

– Bonus payments should be at the absolute discretion of the management

– You may want to add other desirable outcomes for the scheme. For example, you can have “100% of a service with a job description and evaluation” or “complete project X” bonus objectives


– The rules for global bonus scheme should be published and each individual must have a written copy of their own goals and rewards, signed by them and their manager
– The bonus objectives should be agreed within the business planning cycle and before the start of the year in question
– Performance against targets should be reviewed as part of the evaluation process and performance management immediately after the end of the year
– When in doubt, keep it simple.


About Author

Leave A Reply