In this paper, the researcher will discuss reward practices/incentive plans and the way managers can use them strategically to improve employee performance. Thus the discussion seeks to answer the question: How reward practices or incentive plans can influence employee behavior and improve their productivity?…
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The paper tells that managers have grown to understand that setting a strong management system is the main force that helps a company in the achievement of strategic goals. A strong management system is one, which includes such features and processes, which not only benefit the organization but also the employees. Reward practice is one of the most considerable features of a strong management system, which play a vital role in improving employee productivity and performance. Incentives are those benefits that a company offers to its employees as a reward for achieving some particular goals and objectives for the company. Incentive plans also plays a considerable role in achieving maximum sales employees’ productivity. Schwartz found that incentives plan is one of the most important planning activity related to the employees of a company. Ellis-Christensen states, “They could help encourage members of a company to achieve certain goals or they might jumpstart extra learning in a classroom”. The factors that managers should consider while developing an appropriate incentive plan for the employees include type of compensation plan, method of payment calculation, discretion to award, conditions for implementation of the plan, practicalities of the plan, and culture of the company. According to Colt and Perrin, all companies develop incentives schemes that support and communicate the cultural values of those companies. Managers should consider the organizational capabilities, managerial maturity, as well as the culture of the organization while designing a reward/incentive plan for the employees....
15), all companies develop incentives schemes that support and communicate the cultural values of those companies. Managers should consider the organizational capabilities, managerial maturity, as well as the culture of the organization while designing a reward/incentive plan for the employees. Pay for performance acts as one of the most suitable motivational factors for the employees. It is very important to do a complete study of the organizational culture while designing a reward system in order to ensure alignment of reward system with the achievement of organizational goals. 3.2 Needs and Demands of Employees According to Beardwell (2010), understanding employees’ needs and demands is also very necessary to design an employee-oriented incentive plan. Managers should design an incentive plan by incorporating the basic needs and demands of the employees in the plan. When the employees of a company know that their company has implemented an incentive plan through which it rewards their job productivity and efficiency in terms of both cash rewards and non-cash rewards, they show more commitment to their work, which not only improves their productivity but also increases the overall productivity of the company. 3.3 Statement of Plan’s Objectives The most critical issue, which managers need to consider while developing an incentive plan, is development of a clear statement of the plan’s objectives. The statement includes purpose of the plan, eligibility criteria, and types of incentives. Goal setting and employees’ improved performance are two of the basic advantages of an incentive plan. 3.4 Link Performance to Organizational Goals Alignment of the employees’ performance with the organizational goals is the
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