Noe Chapter 12 Recognizing Employee Contributions with Pay Incentive Pay forms of pay linked to employees performance as an individual group member or organization member Pay for Individual Performance Piecework Rate a wage based on the amount workers produce o Straight Piecework Plan incentive pay in which the employer pays the same rate per piece no matter how much the worker produce o Differential Piece Rates incentive pay in which the piece rate is higher when a greater amount is produced Standards Hour Plan an incentive plan that pays workers extra for work done in less than a preset standard time ex should take 2 hours but do in 1 hour get paid full amount Merit Pay a system of linking pay increases to ratings on performance appraisals Performance Bonuses Commissions incentive pay calculated as a percentage of sales Pay for Group Performance Gainsharing group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees o Scanlon plan gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard Group Bonuses and Team Rewards Pay for organizational performance Profit Sharing incentive pay in which payments are a percentage of the organization s profits and do not become part of the employees base salary Stock Ownership management o Stock Options rights to buy a certain number of shares of stock at a specified price top o Employee Stock Ownership Plan ESOP an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust everyone Balanced Scorecard a combination of performance measures directed toward the company s long and short term goals and used as the basis for awarding incentive pay
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