2. IN THE NAME OF ALLAH THE MOST BENEFICIAL AND MERCIFUL

3. ROLL # 24

5. CONTENTS WHAT IS INCENTIVE? WHEN TO USE INCENTIVE? HOW TO IMPLEMENT INCENTIVE PLANS? WHY INCENTIVE PLANS DON`T WORK? COMMITMENT AND INCENTIVE. ACTIVITIES CONTRIBUTE TO BUILD COMMITMENT SMALL BUSINESS APPLICATION. INCENTIVE PLANS IN PRACTICE. OBJECTIONS. SUGGESTIONS.

6. Incentive means the extra benefits given to employees and workers to motivate them.

7. Overtime Payments, Bonus, are given to employees & workers to increase productivity & to increase efficiency of work

8. When to use incentive? When employees are unable to control output or quantity. When delays in the work are frequent and beyond the employee`s control. When quality is a primary consideration, pay based on time is more appropriate.

9. Use of Incentive Plan When there is a clear relationship between employee effort & quality or quantity output. When the job is standardized, the work flow is regular & delays are few. When quality is less important than the quantity.

10. How to implement incentive plan? Link the incentive with your strategy. Ensure that efforts & rewards are directly related. Make your plan understandable by employees Set effective standards. Guarantee your standards. Have good measurement systems. Emphasize long as well as short term success.

11. Why incentive plans don`t work? Performance pay can`t replace good management. You get what you pay for. Pay is not a motivator. Rewards punish. Rewards rupture relationship. Rewards can unduly restrict performance. People work for more than money.

12. Incentive are best installed within a framework of H-R related practices that encourage employee commitment by making the sort of place in which the employee wants to work.

13. Activities contribute to build commitment Clarifying the goals & missions of organization. Guaranteeing organizational justice. Creating a sense of community. Supporting employee development. Career enhancing activities. Committing to people-first values.

14. Incentive Plans In Practice Individual Performance Awards. Team Awards. Gain Sharing Plans. Standard hour Plan. Group Incentive Plan. Profit Sharing Plan.

15. Based on percentage use of incentive plan, the sample of 1244 companies use this. About 41% have individual performance awards, 25% have team awards, 19% have gain sharing plans.

16. Piecework is the oldest type of incentive work. Workers are paid on the basis of number of units produced.

17. Some experts list several objections to using incentive plans. These include: Performance can`t replace good replacement.

18. SUGGESTIONS We suggest using incentive plan when: Units of output are easily measured. Employees can control output. Effort-reward relationship is clear. Work delays are under employee`s control. Quality is not paramount. Organization must know precise labor costs anyway.

19. ALLAH HAFIZ