© Prentice-Hall, Inc., 2001 Chapter Five Incentive Pay

© Prentice-Hall, Inc., 2001 Table 5-2 Typical Performance Measures for Individual, Group, and Company-wide Incentive Plans (1 of 2) l Individual Incentive Plans »Quantity of work output »Quality of work output »Monthly sales »Work safety record »Work attendance l Group Incentive Plans »Customer satisfaction »Labor cost savings (base pay, overtime pay, benefits) »Materials cost savings »Reduction in accidents »Services cost savings (e.g., utilities)

© Prentice-Hall, Inc., 2001 Table 5-2 Typical Performance Measures for Individual, Group, and Company-wide Incentive Plans (2 of 2) l Company-wide Incentive Plans »Company profits »Cost containment »Market share »Sales revenue

© Prentice-Hall, Inc., 2001 Table 5-4 A Sample Behavioral Encouragement Plan That Rewards Employee Attendance NUMBER OF DAYS ABSENT 0 days (perfect attendance) 1 day 2 days 3 days 4 days $250 $200 $100 $ 50 $ 25 MONETARY INCENTIVE AWARD At the end of each three-month period, employees with exemplary attendance records will receive monetary incentive awards according to the following schedule. Note that the number of days absent does not refer to such company-approved absences as vacation, personal illness, jury duty, bereavement leave, military duty, scheduled holidays, and educational leave.

© Prentice-Hall, Inc., 2001 Table 5-7 Scanlon, Rucker, and Improshare Plans: A Comparison of Key Features FEATURE Program goal Basis for savings Employee involvement Type of employee involvement Bonus payout frequency SCANLONRUCKERIMPROSHARE Productivity improvement Labor costs Required Screening and production committees Monthly Productivity improvement Labor costs plus raw materials costs plus services costs (e.g., utilities) Required Screening and production committees Monthly Productivity improvement Completing work at or sooner than production standard Not required Not applicable Weekly