|
|
|
|
|
| Components Of Compensation |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
| |
Strategic Incentive Plan
|
Payroll Home » Compensation » Incentive Management » Strategic Incentive Plan
|
| |
|
|
In today’s competitive business world of globalization organizations should formulate compensation strategies keeping in mind their employees’ interest. With more and more players entering the market and high attrition rate, it is a challenge for organizations to retain their talented human resource. The organizations should follow a systematic process to formulate the incentive plans.
Incentive Strategy Formulation Process
Organizations should first understand the need of incentive plans. They should set clear objectives as of why incentive plans are formulated, what are the objectives. These objectives should be in alignment with
| |
organizational goals and objectives.
Various options for individual and group incentive plans should be explored.
Benefits and disadvantages of each plan should be considered and from the various options available one incentive plan should be chosen.
Using the best incentive plan, compensation strategy should be formulated.
Figure: Incentive Strategy Formulation Process
Organizations should provide rewards based on employees’ performance. Significant monetary and non-monetary rewards should be given. Performance standards set should be acceptable by the management and the employees. The methods of appraisal should be fair and known to all the employees. Organizations should see that all the employees receive adequate compensation based on the internal equity with respect to the industry standards.
Organizations face some problems while setting up the incentive plans. Some employees do not trust the organizational policies. They complain that the performance standards set are not fair. There are also confusions related to the formulas used to calculate the payout incentives.
|
| |
|
|
|
|
|
|
|
