3 3 8

For incentive plans to work, they must be well designed and administered. It
appears that an individual incentive plan is likely to be more effective under
certain circumstances.28
The task is liked.
The task is not boring.
The supervisor reinforces and supports the system.
The plan is acceptable to employees and managers and probably includes them
in the plans design.
The incentive is financially sufficient to induce increased output.
Quality of work is not especially important.
Most delays in work are under the employees control.
Team incentives Piecework, production bonuses, commissions, a id other
individual incentives can be paid to teams of individuals. This might be done
when it is difficult to measure individual output, when cooperation is needed
to complete a task or project, and when management feels this is a more
appropriate measure on which to base incentives. Team incentive plans also
reduce administrative costs. Most compensation professionals report that
companies are increasingly interested in new group reward strategies,
particularly small-group incentives.29 Small-group incentive plans are one of
the newest and fastest-growing reward strategies.
There are a number of logical reasons why a team incentive plan is chosen. In
some situations, jobs and work output are so interrelated that it is
impossible to specifically pinpoint individual performance. In such a
situation, a team incentive could be used. The Japanese have used team
incentives to help foster group cohesiveness and reduce jealousy. They assume
that rewarding only one individual or a few workers will discourage a sense of
teamwork.3 In the United States, however, individual spirit and individual
self-confidence are not fully supported by a team work approach. Thus, in the
United States, there may be a clash between societal norms and group incentive
systems. For small-group incentives to be effective, management must define
its objectives carefully and then analyze the situation to select the most
appropriate group incentive.
Several aspects of team-based incentive pay need further research: When should
team pay be introducedbefore, with, or after creation of work teams? How can
an organization avoid making mistakes when switching o team incentives?3
In individual and group incentive systems, competition can result in with
holding information or resources, political gamesmanship, not h lping others,
and even sabotaging the work of others. These behaviors can be costly to an
organization. In an attempt to minimize these problems of interindividual and
intergroup competition, some organizations have elected to use
organizationwide incentive plans.
Organizationwide incentives Payments shared by all members of the organization
are a much more common incentive reward than individual or group incentives.

These organizationwide payments are usually based on one of two performance

concepts: a sharing of profits generated by the efforts of all employees
altogether and a sharing of money saved as a result of employees efforts to
reduce costs.32 Three ap-