Business organizations should formulate and implement competitive incentive plans for their employees. Incentive plans also commonly referred to as performance incentive plans motivate workers to attain set objectives as well as enhance business growth. Effective incentive plans facilitate good organizational behavior in specified periods, which help in attaining organizational goals.
Companies which have effective incentive plans for employees have been noted to attract talented and potential employees. These plans also boost company loyalty among employees and in turn yield to higher levels of production. For an incentive plan to be effective, it should hold obtainable goals and consider all aspects of employees. In this essay, the criteria of an effective incentive plan will be reviewed.
In determining the effectiveness of an incentive plan, the attention to employee needs should be prioritized. Effective incentive plans must pay special attention to short and long term employee needs. This is one of the ways of ensuring an employee incentive plan is effective. Instead of generalizing and pre-choosing the benefits for the employees, management should consider the opinions of employees regarding their needs.
It is effective and more satisfying to offer incentive plans which match the needs of employees. This will yield more satisfaction and efficiency in motivating employees. The diversity of employee needs in should be taken into consideration so as to ensure the benefits and rewards offered by the organization are relevant.
For an employee incentive plan to be effective, it should be clearly understood by all members. In this case, the issue of ease of communication should prevail in incentive plans. In examining an effective incentive plan, the issue of simplicity should be considered so as to ensure ease in communication. Incentive plans should not be complex but rather straight forward and ease to understand.
From another perspective, the aspect of discrimination should be taken in account. Effective incentive plans should not discriminate employees on payments based performance standards. The potentials of each employee should be embraced.
Evaluate current business economic drivers A key issue of consideration in incentive plan evaluation is comprehensiveness. Incentive plans should comprehensively address all set goals and objectives. Revenue growth, profitability, productivity, and customer loyalty among other factors should be considered.
It is important for incentive plans to have an internal control structure. This will help in motivating the behavior of employees as well as top management. Individual and group awards should be clearly defined.
Conclusion
Organizations should consider all issues affecting the employees in development of incentive plans. It is important for organizations to prioritize employees individual and groups needs in choosing the benefits programs. This will enhance employee satisfaction as well as the relevance of the incentives offered.
Other issues of great concern include ease in communication, comprehensiveness, fairness, and long and short term objectives. By considering all these elements in the development of an incentive plan, efficiency and effectiveness will be attained. These issues should also be adhered to in evaluation of incentive plans to ensure their effectiveness.