Incentives of the Employer and Employee - Research Paper Example

Incentives of the Employer and Employee Incentive Incentive is a payment, reward or some sort of compensation that would motivate or encourage one to do something extra or specific (Fisher, 23). Employer incentive Employer incentives are rewards for employers, usually setup by the government in the form of funding, so that the employer would increase employment of apprentice or trainees in specific areas where there is shortage in the skill set. Incentives to employers could be in the form of funds or something of value (Fisher, 24). Employee Incentive Employee incentives are rewards, benefits or compensation offered to employees by managers or organizations to motivate and encourage them to perform above and beyond the normal or standard routine. Incentives could be based on performance or behavior. Through incentives employees remain motivated to perform and it gives them the opportunity to get a little extra something other than their annual pay (Fisher, 26). Difference between employer and employee Employer is a person or institution that hires workers or employees, whereas an employee is a person in service of an employer under contract of hire. The employer has the power to direct the employee in the manner the work has to be done (Fisher, 87). How to develop and design an employee incentive program Employee incentive program has become a significant element in an HR toolbox. Employee performance has become a very important part for the success of the company due to the competitive pressure and increase in demands. To develop, launch and implement an effective employee incentive program it is important to identify the goal that leads the organization forward towards success. The incentive program should be such that it stimulates employees to achieve company goals. It should also have the potential to grow and increase the job satisfaction and employee morale. The program recompenses and emphasizes actions that have an encouraging influence on the company. Following are some key points to develop an effective employee incentive program (Rosenbloom, 357). Before designing an incentive program, it is important to clearly define the behavior needed to reward and encourage. The program has to be supported by the senior management. Also the program has to be aligned with the company’s mission, vision and value. The budget for the program has to be decided. Also the time period of the incentive program has to be decided and who will be responsible for it. It has to be determined who will be eligible for the program. All levels of employees must be recognized and everybody should have a chance to receive meaningful recognition. Each employee is motivated in different ways. It is required to identify what is vital to them, and propose a range of remuneration options. The incentive program needs to be communicated to the employees properly otherwise no one will participate. Types of performance and behaviors that are to be encouraged need to be clear. Regular and ongoing reminders have to be provided in order to keep the enthusiasm high. The program should be continuously evaluated and modified so as to ensure that it continues to be effective (Rosenbloom, 398). Following are the steps to develop the program. First step is to create a brief survey and distribute to employees asking for incentive ideas. Evaluate the responses in terms of tangible or intangible rewards. The survey should ask questions about recognition and rewards without differentiating between monetary and non-monetary rewards. Employees are to be provided with clear choices in the survey in order to get clear answers. Questions should be asked to check the employee preference of a cash reward over a personalized inscription or plate for being employee of the month. A variety of financial and non-financial awards should be listed in the survey and employees should be asked to grade their choices from 1 to 10. Questions should not emphasize explicitly on monetary incentives. Results should be reviewed from exit interviews of workers that leave the company. Sometimes employees resign from their positions as they have an opinion that the company put too small a price on their involvement in the organization. They also leave due to the companys compensation and incentive practices. It has to be analyzed and determined whether compensation and rewards are the main reason behind the employee’s departure. Information is needed to be gathered from competitors with reference to salaries, bonuses, earnings, or other employee incentives. What incentives the competition is offering also needs to be analyzed. Current incentive methods need to be reviewed. If there is a current incentives program and it seems underappreciated, then examine whether the financial plan have the funds for better incentives or granting enticements to a higher percentage of the staff. If certain employees always seem to get the finest incentives, then study and revise the standards so more staff workers qualify for new incentives. Changes to the employee incentive program need to be published in the company newsletter. It is important to keep employees informed of changes. Employees often find it hard to accept changes that lack support from upper management therefore, support from the upper management is particularly important. Revealing the new incentives in a fanfare event could be a good idea to create excitement about employee rewards. Analyze employee satisfaction in the new or improved incentive plan by mounting a survey and studying exit interview material. Examine revenue before and after executing the employee incentive program so as to realize the effectiveness of the rewards system (Rosenbloom, 466). Important points to remember are: To clearly define the purpose of the program, and what actions will be remunerated and how the scheme will work. Agree on the financial plan for the program, for how long it will last and who will manage it. Select a remuneration system that meets the employee’s specific requirements and motivations. Communicate the program frequently so that the staff will contribute and sustain interest. Incentive Role The role of incentive is very important as through incentives employees remain motivated. It is an important part of HR as employee performance has become a very important part for the success of the company. The incentives should be such that it encourages employees to achieve company goals. It should also have the potential to increase employee spirits and contentment. The incentive should reward and reinforce behaviors that have a positive impact on the company. They should be based on performance or behavior (Fisher, 211). Incentive program and strategy in the OSHA OSHA is the chief national agency responsible for the implementation of safety and health legislature. Following is an overview of a strategy development process to bring an incentive program into operation (Hoffmann). The developed process consists of seven steps: 1. Organizational vision and mission statements; 2. Strategic analysis; 3. Deriving strategic goals; 4. Developing alternative strategic concepts; 5. Deploying selected strategy; 6. Strategy implementation controlling; 7. Strategy review. There is a feedback loop between step 7 and step 1, which means that there are cycles that must be gone through every year so that an incentive program can be developed (Hoffmann). Organizational vision and mission statements The objective of this step is to define the incentive policy so as to specify the scope of action, explaining the specific understanding of health, reflecting on the design principles for incentive programs and defining fields for action for the strategic analysis to get more detailed information. Once this step is taken, the actual incentive program can take off (Hoffmann). Strategic analysis The objective of this step is to carry out a strategic analysis to gather the basic information for the strategic development of the incentive program. This means analyzing internal and external prerequisites, and drawing up a holistic picture of the strategic starting point for both incentive provider and beneficiaries (Hoffmann). Deriving strategic goals In this step, the strategic goals and indicators should be decided in order to focus the conceptual development of the incentive program and to determine a base so that the achievement of goals can be measured. In this process, a balance between stakeholder needs and strategic goals should be ensured (Hoffmann). Developing alternative strategic concepts The objective of this step is to develop strategies to identify a method of achieving the strategic goals by drawing a desirable holistic picture of the future situation, deriving alternative strategic concepts for the incentive program, selecting the best strategic concept, and defining a project manager or process owner for implementation (Hoffmann). Deploying selected strategy This step aims to transform the selected option to an action plan, by defining work packages for implementation and an implementation schedule, and validating the implementation concept with the stakeholders (Hoffmann). Strategy implementation controlling In this step, the fit between planning and acting needs to be ensured. This can be done by initiating appropriate management for strategy implementation, assessing progress in work and adopting action plans and goals if necessary, announcing and promoting the incentive program, and rolling out the incentive program (Hoffmann). Strategy review The final step is a review on the strategic level in order to ensure the effectiveness and efficiency of the incentive program. In this phase the achievement of the strategic goals, the adequacy of the incentive program, and the change of relevant framework conditions need to be checked (Hoffmann). Safety Incentive Program A safety incentive program is an official company plan specifying noticeable rewards for workers for the organized lessening of office mishaps, diseases, and dangers. The Occupational Safety and Health Administration (OSHA) have laid down a complete set of controlled procedures for the planning and execution of office safety incentive programs in various businesses (Ingram). Scope of Safety Incentive Program OSHAs guidelines for safety incentive programs are planned to go well beyond the range and scope of prevailing OSHA protocols. A safety incentive program ought to be present with the goal of decreasing and ultimately abolishing workplace injuries and dangers, and should be concentrating on to the slightest concern that may be ignored by current safety principles. These procedures will help companies cultivate a complete system of danger identification, detection, and assessment across all regions of the organization (Ingram). Considerations of the Program It is critical for the success of the incentive program to have a commitment by top management and leaders in the organization. It is important to have program experts who will communicate the requirement and interest of the program to subordinates. Understanding, acceptance, and commitment of the entire staff are vital to effective implementation of company-wide initiatives (Ingram). General Rules of the Program Incentive programs consistent with OSHAs procedures should offer an organized list of identification and assessment of prevailing threats, as well as the hands-on identification of probable dangers when planning new procedures at workplaces (Ingram). The usefulness of the programs application takes priority over the carefulness or decorum of any transcribed design. The simplest plan, when appropriately communicated and thoroughly put into practice, will be much more required than an extensive transcribed procedure that is not appropriately applied at all organizational levels (Ingram). Modules of Incentive Program Several modules are necessary in any safety incentive program that is following OSHAs plans. The first module is the identification of dangers, followed by the definite anticipation of recognized dangers through strategy and procedure reassessment. The third module is ongoing safety training. It assists to teach the personnel on the significance of danger avoidance. The next vital module is a clearly verbalized transcribed strategy, followed by observable top management participation and effective communication through all planes of the organization. Introduce clear ranks of power and officially give duties and responsibilities to complement management participation (Ingram). The Future of the Program Employers have varied feelings about OSHAs safety incentive program procedures. Most employers surveyed consider that a safety incentive program is vital to safeguarding a greater degree of workspace safety. Some state that the procedures would remain further effective if they were compulsory. Others claim that a method of tax motivations for employers following these procedures would be further effective in safeguarding lively involvement (Ingram). Factors Affecting Safety Incentive Program Employers have been encouraged to stay away from safety management programs that mainly track the program’s usefulness based upon the amount of recordable injuries experienced by an employee. The main objective for discouraging such programs is that programs driven by recordable incidents concentrate on indicators that may not pinpoint causes, and may be affected by unpredictability (Mavity). Another reason to move away from such programs is the accuracy of employer record keeping. It is assumed that employees do not report workplace injuries frequently in order to take part in safety incentive programs, or consequently because they are forced by employers (Mavity). A Memorandum has been issued on Employer Safety Incentive Policies and Practices. In that OSHA deliberates reporting of an injury to be a safe action, and will look into the matter if an employee is sacked, or undergoes other actions after reporting an injury (Mavity). OSHA also states that if an employee is not following reporting procedures it will study whether the worker’s deviation was negligible, unintentional or deliberate, and whether the employee’s actions were rational (Mavity). OSHA also states that it will determine whether the injured employees are more frequently disciplined compared to others who work in a risky way. They will also consider whether the employer monitors the workplace for compliance with the rules even if there are no injuries and that whether any action is taken on uninjured workers who are violating work rules (Mavity). In conclusion, OSHA states its concerns about employers, intentionally or unintentionally, launching programs that provide employees an incentive for not reporting injuries. According to OSHA it is not illegal to award prizes or money to workers if they are not injured within a certain time period, but it does not support such programs. It recommends that employers should instead offer incentives to workers who use safe practices (Mavity). Works Cited Fisher, John. How to Run Successful Employee Incentive Schemes: Creating Effective Programs for Improved Performance. 3rd ed. London. Kogan Page. 2008. Print. Hoffmann, Judith. Development of a strategy for an Incentive Program. European Agency for Safety and Health at Work. 24 Nov 2010. Web. 16 April 2012. Ingram, David. OSHA Safety Incentive Program. EHow.com.n.d. Web. 16 April 2012. Mavity, Howard. OSHA Formalizes Criticism of Employee Safety Incentive Programs. Safety.BLR.com. 9 April 2012. Web. 17 April 2012. Rosenbloom, Jerry. The Handbook of Employee Benefits.7th ed. Martinsburg. McGraw-Hill. 2011. Print. Read More