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Module 11-1
Pay for Performance
and Financial Incentives 11
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Module 11-2
Learning Objectives
1. Explain how you would apply five motivation theories in formulating an incentive plan.
2. Discuss the main incentives for individual employees.
3. Discuss the pros and cons of commissions versus straight pay incentives for salespeople.
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Module 11-3
Learning Objectives
4. Describe the main incentives for
managers and executives.
5. Name and define the most popular
organization-wide variable pay
plans.
6. Outline the steps in designing
effective incentive plans.
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Module 11-4
Money and Motivation
Strategy
Performance
Incentive Pay
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Module 11-5
Explain how you would apply
five motivation theories in
formulating an incentive
plan.
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Module 11-6
Motivation and Incentives
• Maslow’s
Hierarchy of
Needs
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Module 11-7
Motivation and Incentives
• Herzberg’s
Two-Factory
Theory
• Deci and
demotivators
Hygiene
Motivators
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Module 11-8
Motivation and Incentives
• Expectancy
Theory, Victor
Vroom
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Module 11-9
Motivation and Incentives
• Behavior modification
• Incentive pay terminology
• Employee incentives and the law
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Module 11-10
Review
• Money and motivation
• Motivation theories
• Incentives
• Terminology
• The law
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Module 11-11
Discuss the main incentives
for individual employees.
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Module 11-12
Individual Employee Incentive
and Recognition Programs
• Merit pay as an
incentive
oDifferential pay
increases
oMerit pay options
• Piecework plans
oStraight
piecework
oStandard hour
plans
oPros and cons
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Module 11-13
Individual Employee Incentive
and Recognition Programs
• Incentives for professional employees
• Nonfinancial and recognition-based
awards
o Incentives managers can use
• Online and IT-supported awards
• Job design
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Module 11-14
Review
• Piecework
• Merit pay
• Incentives for professionals
• Nonfinancial rewards
• Online
• Job design
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Module 11-15
The Pros and Cons of
Commissions vs. Straight
Pay Incentives for
Salespeople
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Module 11-16
Incentives for Salespeople
• Salary plan
• Commission plan
• Combination plan
• Maximizing sales force results
• How effective are your incentives?
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Module 11-17
Review
• Types of sales
incentives
• Maximizing results
• Effectiveness
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Module 11-18
Describe the main incentives
for managers and executives.
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Module 11-19
Incentives for Managers
and Executives
• Strategy and the executive’s long-term and total rewards package
• Sarbanes-Oxley Act
• Short-term incentives, annual bonus
oEligibility
oFund size
o Individual performance
oFormula
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Module 11-20
Incentives for Managers
and Executives
• Strategic long-term incentives
oStock options
oStock option problems
oOther stock plans
oEthics and incentives
• Other executive incentives
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Module 11-21
Review
• Strategy and long-term incentives
• Federal law
• Short-term incentives
• Strategic long-term incentives
• Other incentives
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Module 11-22
The Most Popular
Organization-wide Variable
Pay Plans
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Module 11-23
Team & Organization-wide
Incentive Plans
• Designing team incentives
oEngineered standards
oPros and cons
• HR inequities that undercut team
incentives
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Module 11-24
Team & Organization-wide
Incentive Plans
• Profit-sharing plans
• Scanlon plans
• Other gainsharing plans
• At-risk pay plans
• Employee stock ownership plans
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Module 11-25
Review
• Team incentives
• Inequities
• Profit-sharing
• Scanlon and gainsharing
• At-risk
• ESOPs
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Module 11-26
The Steps in Designing
Effective Incentive Plans
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Module 11-27
The Five Building Blocks of
Effective Incentive Plans
• Common sense
• Linkages
• Effort Rewards
• Standards
• Contract
• Measurement
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Module 11-28
Review
Sense
Linkages
Motivation Standards
Scientific