Dear Members, Kindly mention your practical experiences / views on whether Incentive based work performance is good or bad for organization?
From India, Buldana

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There are two dimesions:

1) Incentive: Mainly direct contribution given by the copmany to employee for his performance, This is a share in the business made, example: Sales Incentive

2) Performance Bonus: It is a recongnization given by an employee where employee is aligned towards the common goals and his individual goals.

Now the philospphies should be implemended depedning upon the organization, sector and products.

Sales Incentives are common in FMCG industries for sales people where direct and short term resluts are expected to gain or maintain the marjet share.

In production department workers are given the incentive for busting the short term production,

However Incentives has some disadvantages.

Performance Bonus is onging bonus paid yearly (or queterly and even half yearly) which is a part of CTC and is a variable pay based on the overall business growth and KRAs.

Both schemes are good, but needs to be evaluated on its own merits and demerits.

Please wait my next article on this on my blog....with different dimesions and with my pracxtical experiences.


From India, Pune
Incentives are part and parcel of employee motivation, productivity strategies,pay packages and sometimes even as tool of behavioural therapy also.For example, attendance bonus is an incentive to make employees punctual and regualr to work.Therefore you cannot do away with them at any rate. You need to be careful in choosing as to waht you should offer as an incentive.For example, over time shall not be offered as an incentive as it may make employees to convert it into asource of profit over aperiod of time.

From India, Mumbai
Monetary allowances as incentives based on performance will certainly play a major roll in motivating the employees. But a clear, transparent and a comprehensive scheme need to be formulated and implemented after getting due feedback from the concerned.
Whether it is paid based on individual or company’s performance, only those employees whose performance are measured will get substantial benefits; whereas others whose jobs can easily not be measured will get a relatively lesser share, despite putting sincere efforts. These things need to be carefully analyzed before implementing a scheme.
Balamurugan Sivaprakasam

From India, Madras
I do not know how effective it will be to reduce an employee's salary to 25% and then introduce a performance-based incentive for him. Most of the human beings are sensitive to this issue (salary). So does not management/HR should consider this issue. Recently this has happened to my friend who is working in a multi speciality hospital as cardiologist. He was drawing a okay salary, but as a part of company's new HR policy all doctors' salary have been decided to cut 25% as part of implementing a new incentive system. My friend got agitated and he decided to quit the job saying that as he has already been underpaid and the new rules will affect his financial planning.
Dear friends, from HR perspective and from an employee's perspective I would like to hear your feedback regarding the above said situation.

From India, Thiruvananthapuram
I share your view.When an employee finds the value of currency meant for his family being less by 1/4th, it will be greatly demoralising more so when the inflation is ascending without any respite. He will loose all motivation to work for those incentives.It is not a sound HR policy and it will be self destructive since the hospital will loose talent to others.

From India, Mumbai

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