How Can We Fairly Implement an Incentive Plan for All Employees Across Departments?

Hello, this is my post here, and I am hoping that I will gain some valuable insights from your experience.

Implementing an Incentive Plan for All Employees

Our company is thinking of implementing a good incentive plan for all employees at all levels. I am trying to do some research and understand this in a better way before we start this project. We are a manufacturing company, and we do have an incentive plan for the sales team, but we want to extend the plan to the whole organization, from workers at the floor level to the CEO, across all departments: finance, quality, HR, strategy, marketing, production, IT, shared services, etc. We do have a bonus system, but it's not entirely based on performance. Therefore, we want to quantify the incentive plan to be fair to all and linked to their performance.

Questions on Performance Review and Parameters

Also, I have some basic questions, such as how often we should review the performance under these plans, and what parameters should be used to measure performance for different levels in different departments, as all cannot be measured on the same parameters.

I need guidance and support from all of you.

Thanks,
Vipul

Dear Vipul, you have provided some information about what you want to do, and I thank you for that. Please also provide details about your role, background, and who wants to introduce incentive plans from top to bottom.

Kindly refer to the following links for additional insights:
- [10 Reasons Incentive Compensation Plans Fail | Risk Management](http://enewsletters.constructionexec.com/riskmanagement/2013/06/10-reasons-incentive-compensation-plans-fail/)
- [Making Across-the-Board Incentives Work - Harvard Business Review](http://hbr.org/2002/02/making-across-the-board-incentives-work/ar/1)
- More links can be found at [Google Search](https://www.google.co.uk/#q=company+wide+incentive+plans)

Thank you.

Incentive Plan Based on KPIs

Production figures may be the key performance indicator (KPI) around which an incentive plan can be built. To achieve this KPI, every department must focus; hence, the same monthly incentive amount can be given to everyone. It is important that it is equal.

Another alternative could be based on the proper utilization of machines. Another KPI could revolve around the company's goals achievement. The incentive plan should be for a fixed period of time, and then the plan should be revised according to the outcomes.

Important Things to Remember:

• Equal pay
• Proper communication
• Starting with a fixed tenure and then revision afterwards
• Deductions on the incentive plan for wrongdoings, such as any safety incidents, should have negative points.