Incentive Plan - Research Paper Example

– Boeing Employee Incentive Plan & The Humanistic Era This report assesses the relationship of the Boeing employee incentive (compensation) program to the foundational aspects of Humanistic Era. The Humanistic Era (the human resources era) is a timeline where management theories were created following the Classical Era. These theories that are directed at the employee and organization achieving productivity through organizational groups while encouraging a higher level of employee personal satisfaction while doing so (Owens & Shakeshaft, 1992; Shepard, 2011).

The aspects to be assessed from this era include and are defined as group cohesion - individuals stick together as a part of a group or team even when there are difficulties or challenges to work through. Difficulties can serve to make the team members closer and more loyal to one another; group motivation – the driving force that pushes the group forward to accomplish goals; group recognition – acknowledging the group for accomplishing goals; and group cooperation – when the individual group members combine efforts to achieve a common goal (Shepard, 2010).

An important aspect of the Humanistic Era is the theorists that worked to find mechanisms within the organization to engage and reward employees for their work in accomplishing organizational goals, leading compensation and incentive programs to become popular during that time. The employee incentive program has remained an important tool to drive employee performance to leverage organizational goals. The Employee Incentive Program is described in a summary and a PDF found on the Boeing website (Boeing, 2011a; Boeing, 2011b).

The official Plan document is the final “controlling document” when a reader may be in doubt as to a reference (Boeing, 2011b, para. 1). Only plan participants are legally entitled to a copy of the plan document. The incentive program provides cash bonuses to those eligible of between 1 and 20 days of pay over and above regular pay if the Company achieves specified goals. The payout amounts from Boeing to the employee for bonus year 2010 to be paid in February of 2011, varied by business unit from N/A up to 15 days (Boeing, 2011a).

Boeing began payments from the plan in the first quarter of 2001, based on meeting profit targets for the year 2000. Payments have continued to occur on a similar timeline since then with 2010 incentives being paid out in regularly scheduled paychecks distributed on February 17 or the first paycheck after that date for employees paid on a different schedule (Boeing, 2011a). The basis for receiving the incentive is predicated on how well the company did financially, how outside events affected the company, and if the company met its’ targets.

The company states that its targets “are very demanding” and align with the goal to provide total shareholder returns in the top quartile of the S & P 500 companies (Boeing, 2011b, para. 5). According to Boeing (2011b), meeting the operating plan target will result in up to 10 days’ pay for the eligible employee. If the company exceeds the target the eligible employee will earn up to 20 days’ pay. If the company meets specified profit levels below the operations goals but above a target minimum, the company will pay between 1 and 9 days of pay.

If target is not met, no EIP payments are made. Profit targets are considered company confidential and will not be posted. Progress made will be reported to quarterly when earnings are released. Eligibility for the incentive is based on the employee being a nonexecutive, non-union employee. Currently, more than 114,000 nonexecutive employees are eligible. The program states that it meets individual needs by recognizing individual contributions that surpass day-to-day organizational needs, but the communication presented fails to share with the reader how the plan goes about doing that.

This is one of the areas that could be improved based on the Humanistic Era. The communication and the marketing of the program are weak. The purpose of the program is not clearly spelled out on the PDF or on the web site. Coles (2001) discusses how what motivates us is formed by our parents. “Right from day one” the parent rewards or punishes based on the “pattern of response” they want to establish (p. 4). But, Cole also adds that companies don’t need to know what motivates the employee, only what their goals are.

Cole then recommends linking the incentive to that goal. This is what Boeing seems to be lacking. Getting to the heart of group motivation as a Humanistic Era component would be motivating employees individually first, based on their personal goals rather than the broader organizational, profit goals only. Re-focus the employees on the specific purpose of the EIP and tell the employees clearly what they can gain from the program. Boeing needs to clearly answer the question for the employee as to “What is in it for me?

” Boeing needs to revise the plan to align the team goals for the Business Unit and the employees’ individual goals by adding components for each. Each team could document in advance of each year what their goals area and then a portion of their incentive calculation can be established for the accomplishment of their team and personal goals each year. Boeing has done a good job keeping the employee focused on the overall organizational goals, but could do a better job focusing the employee on how to maximize the incentive plan for their own accomplishments and their Business Unit level goals.

This could help offset the concern that if the employee happens to be located at a Business Unit that is not doing well, but is personally a high producer they can put some extra effort into the program and make a greater portion of the incentive. These simple additions would take no additional capital and still build on the components of the Humanistic Era by helping the employee achieve their goals. The company is then helping the employee to motivate themselves and “achieve their objectives” (Cole, 2001, p. 6). References Coles, S. (2001). Satisfying basic needs.

Employee Benefits Supplement, p. 3 – 6. Boeing (2011a.). Boeing 2010 EIP Results. Retrieved March 14, 2011 http://www.boeing.com/companyoffices/empinfo/eip/BNN_01-26-11.pdf. Boeing (2011b). Boeing Employee Incentive Program. Retrieved March 14, 2011 from http://www.boeing.com/companyoffices/empinfo/eip/index.html. Owens, Robert G. & Shakeshaft, Charol. (1992). The new "Revolution" in administrative theory. Journal of Educational Administration, 30(2), 4. Retrieved March 16, 2011, from ABI/INFORM Global.

(Document ID: 1064811). Shepard, J. M. (2010). Sociology (10th ed). CA: Wadsworth/Cengage Publishing.