1. Lim Sei Kee @ cK

2. Variable Pay: Incentives for Performance

4. Factors for Successful Variable Pay Plans

5. Individual Incentives Individualism Stressed in Organizational Culture Identification of Individual Performance Independent Work Individual Competitiveness Desired Individual Incentive Pay Plans

6. Piece-Rate Systems Straight Piece-Rate Systems Wages are determined by multiplying the number of pieces produced by the piece rate for one unit. Differential Piece-Rate Systems Employees are paid one piece-rate for units produced up to a standard output and a higher piece-rate wage for units produced over the standard.

7. Bonuses and Special Incentive Programs Bonus A one-time payment that does not become part of the employee’s base pay. Awards Cash or merchandise used as an incentive reward. Recognition Awards Recognition of individuals for their performance or service to customers in areas targeted by the firm. Service Awards Rewards to employees for lengthy service with an organization.

8. Sales Compensation Plans Salary Only All compensation is paid as a base wage with no incentives. Commission Straight Commission Compensation is computed as a percentage of sales in units or dollars. Draw system make advance payments against future commissions to salesperson. Salary Plus Commission or Bonus Compensation is part salary for income stability and part commission for incentive.

9. Why Organizations Establish Team Pay Plans

10. Group/Team-Based Variable Pay Determining Individual Rewards Timing of Team Incentives Deciding the Allocation of Rewards Distributing Team Incentives

11. Conditions for Successful Team Incentives

12. Gainsharing The sharing with employees of greater-than-expected gains in productivity. Alternatives for rewards distribution: A flat amount for all employees Same percentage of base salary for all employees Percentage of the gains by category of employees A percentage based on individual performance against measures

13. Profit Sharing A system to distribute a portion of the profits of the organization to employees. Primary objectives: Improve productivity Recruit or retain employees Improve product/service quality Improve employee morale Drawbacks Disclosure of financial information Variability of profits from year to year Profit results not strongly tied to employee efforts

14. Profit-Sharing Plan Framework Choices

15. Common Executive Perks

16. Benefits Benefit An indirect compensation given to an employee or group of employees as a part of organizational membership. Strategic Perspectives on Benefits Benefits absorb social costs for health care and retirement. Benefits influence employee decisions about employers (e.g., recruitment and retirement). Benefits are increasingly seen as entitlements. Benefit costs are about 40% of total payroll costs.

17. How the Benefit Dollar Is Spent

18. Benefit Needs Analysis A comprehensive look at all aspects of benefits. How much total compensation? What part of total compensation should benefits comprise? What expense levels are acceptable for each benefit? Which employees should get which benefits? What are we getting in return for the benefit? How will offering benefits affect turnover, recruiting, and retention of employees? How flexible should the benefits package be?

19. Types of Benefits

20. Other Benefits BenefitsBenefits Relocation Expenses Life, Disability, Legal Insurances Educational Assistance Social and Recreational Family-Oriented Benefits Family-Care Benefits Credit Unions Purchase Discounts Stock Investment

21. Time-Off Benefits Holiday Pay Eligibility Vacation Pay Leaves of Absence Family Leave Medical and Sick Leave Paid Time-Off (PTO) Plans Military Leave Election Leave Jury-duty Leave Funeral Leave

22. Typical Division of HR Responsibilities: Benefits Administration