HRM ASSIGNMENT

Incentive system for the groups will be as follows:

1)10 Administrative positions- We can use various
financial incentives – financial rewards are paid to
workers whose production exceeds some
predetermined standards.
Performance and pay- Workers are paid to their
performance. With the emphasis on competitiveness,
productivity, and delivering measurable in bottom line
results, the trend for virtually all employers is to tie at
least some portion of their workers pay to the workers
and/or the company’s performance. The problem is
that doing so is easier said than done. Many such
programs are ineffective. With lack of motivation such
program can be somehow ineffective for the company.
Motivation and Incentives- Several motivation theories
have a particular relevance to designing incentive
plans. These include theories associated with
psychologists such as Frederick Herzberg, Edward Deci,
Victor Vroom and B.F. Skinner. These theories can play
a vital role in motivation of employees and also
providing them with some pay incentive.
They can also use Merit Pay as an Incentive- Merit pay
or merit raise is any salary increase the firm awards to
an individual employee based on his or her individual
performance. It is different from a bonus in that it
usually becomes part of employee’s base salary. Merit
pay can be an incentive as it motivates employee to
work harder and with determination as their
performance affects the merit pay, they are going to
get.
2)15 Sales position- Sales compensation plans typically
rely on incentives in form of sales commissions.
However, some salespeople get straight salaries, and
most receive a combination of salary and commissions.
So, such incentive plan can be set for the organisation.
Salary Plan- Firms pay salespeople fixed salaries.
Straight salaries particularly make sense when the task
prospecting, or when it mostly involves account
servicing. The main advantage of straight salary
approach is it makes it easier to switch territories or to
reassign salespeople, and it can foster sales staff
loyalty. The disadvantage is that the pay isn’t
proportionate to results. This can demotivate
potentially high- performing salespeople.
Commission Plan- Straight commission plans pay
salespeople for results, and only for results. Under
these plan salespeople have the greatest incentive.
Commission plans tend to attract high- performing
salespeople who see that effort clearly produces
rewards. The potential drawback of commission- only
plans is that working without a financial safety net can
be unsettling. Also, salespeople tend to focus on
making the sale and on high-volume items, and may
neglect non-selling duties like services small accounts,
cultivating dedicated customers, and pushing hard-to-
sell items.
Combination plan- Company can pay salespeople a
combination of salary and commissions. This provides a
financial security and also an incentive to earn more in
terms of commission.
However, while commission plan predominates in auto
dealerships, they are not as popular as they were, with
many dealerships substituting salary plus bonus plans
for commissions.
3)10 Service positions (mechanics)- The company is
following one of a piecework plan standard hour plan
in which worker is paid a basic hourly rate for
production exceeding the standard hourly rate but is
paid an extra percentage of his or her rate for
production exceeding the standard hour. The plan is
not working out for the company as the turnover is
very less. So, the other incentive system that the
company can follow are:
Merit Pay- Merit pay or merit raise is any salary
increase the firm awards to an individual employee
based on his or her individual performance. It is
different from a bonus in that it usually becomes part
of employee’s base salary. Merit pay can be an
incentive as it motivates employee to work harder and
with determination as their performance affects the
merit pay, they are going to get.
They can provide incentives to professional employees-
Usually paying good to the skilled professional can be
an alternative as the skilled employees are harder to
find.
They can also use some combination of financial and
non-financial incentives. The most used rewards to
motivate employees were- employee recognition,
training programs, cash rewards, special events and
various others.

These are some suggestions to workout the incentive

system in the organisation.