Tuesday, June 22, 2010
[IWS] EFFECTIVE EMPLOYEE INCENTIVE PLANS: FEATURES AND IMPLEMENTATION PROCESSES (Cornell HR Review) [31 May 2010]
IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
Cornell HR Review
Allison A. Gordon, Jennifer L. Kaswin
Effective Employee Incentive Plans: Features and Implementation Processes
In Essays on May 31, 2010 at 6:41 pm
[full-text, 6 pages]
A 2007 WorldatWork survey found that 70 percent of compensation professionals believe that incentive pay is “important or very important” to the success of their organization. The economic downturn has accentuated the need to contain compensation costs by holding down fixed-based salary expenses. To maintain competitive pay plans, an increasing number of companies are giving more employees across different job functions the opportunity to earn variable, performance-driven incentives for achieving individual and organizational goals.
This paper will evaluate the effectiveness of broad-based employee incentives, identifying the features of effective plans. For our purposes, “broad-based” is used to signal that more than 50 percent of employees are eligible for this variable pay plan. In addition, the terms “variable pay plan” and “pay for performance” are used interchangeably as they appeared in the original sources.
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