IndependenI UniversiIy Bangladesh

Subm|tted 1o
Dr Md Moazzam nusa|n
Subm|tted 8y
Sazzad Hasan Id: 0931043
Yasinul Islam Id:

Course ID: HRM-370
Subm|ss|on Date
th
Nov


oo//c No/r///o/ rr /r //c//o o rr

IncentIve pay pIan:
The Idea of IncentIve pay Is to create IncentIves for empIoyees to
Improve theIr job performance by IInkIng empIoyee pay to empIoyee
job performance.
IncentIve pay Is aIso caIIed:
O !ay for performance
O !erformance-based pay systems
O !erformance-based reward systems


lncenLlve ay
lan
9|ecework
Standard hour
p|an
8onus
Mer|t pay
Incent|ve for
profess|ona|
1eam
Comm|ss|on
9|ans
compensat|on
Scan|on p|an
9rof|t shar|ng
Lmp|oyee stock
ownersh|p p|an

Picccwork PIan:
Iicccwork is a sysicm o labor in which paymcni is bascd on ihc aciual numbcr o
picccs produccd raihcr ihan hours workcd, rcgardlcss o how long ii iakcs. Iiccc-
work has had a placc in many sociciics. In ancicni sysicms, laborcrs baricrcd ihcir
amouni o produciion or an amouni o paymcnioicn in ihc orm o ood. In
Lngland, prior io ihc Indusirial Rcoluiion, ihc icxiilc indusiry rclicd on work
donc in homcs on a picccwork basis.
$9andard Hour PIan:
Anoihcr common inccniic icchniquc is ihc siandard hour plan, which scis
inccniic raics on ihc basis o a prcdcicrmincd "siandard iimc" or complciing a
[ob. Siandard hour plan inccniic plan ihai scis raics bascd on ihc complciion o a
[ob in a prcdcicrmincd siandard iimc I cmployccs inish ihc work in lcss ihan ihc
cxpccicd iimc, ihcir pay is siill bascd on ihc siandard iimc or ihc [ob muliiplicd
by ihcir hourly raic. Siandard hour plans arc pariicularly suiicd io long-cyclc
opcraiions or [obs or iasks ihai arc non rcpciiiic and rcquirc a ariciy o skills.
Bonuscs .
A bonus is an inccniic paymcni ihai is gicn io an cmploycc bcyond onc's
normal basc wagc. Ii is rcqucnily gicn ai ihc cnd o ihc ycar and docs noi
bccomc pari o basc pay. Bonuscs hac ihc adaniagc o proiding cmployccs
wiih morc pay or cxcriing grcaicr cori, whilc ai ihc samc iimc ihc cmployccs
siill hac ihc sccuriiy cra basic wagc. Bonus paymcnis arc common among
managcrial and cxccuiic cmployccs, hui rcccni ircnds show ihai ihcy arc
incrcasingly gicn io cmployccs ihroughoui ihc organizaiion.


Mcri9 Pay.
A mcrii pay program (mcrii raisc) links an incrcasc in basc pay io how
succcssully an cmploycc pcrorms his or hcr [ob. 1hc mcrii incrcasc is normal/y
gicn on ihc basis o an cmploycc's haing achiccd somc ob[cciic pcrormancc
siandard-alihough a supcrior's sub[cciic caluaiion o subordinaic pcrormancc
may play a largc rolc in ihc incrcasc gicn. Mcrii raiscs can scrc io moiiaic i
cmployccs pcrccic ihc raisc io bc rclaicd io ihc pcrormancc rcquircd io carn
ihcm.
Mcri9 Raiscs:
Mcrii raiscs arc gicn on ihc basis o prcdcicrmincd policics. 1hc cmployccs arc
gicn raisc on ihc basis o ihcir pcrormancc. 1hc pcrormancc siandards arc sci
by ihc organizaiions much in adancc.

Profi9 sharing pIan :
A singlc paymcni undcd by a poriion o ihc company's annual proii paid io an
indiidual or group ai ihc cnd o ihc ycar
Gain sharing PIans:
A plan ihai pays indiiduals or groups a sharc o cxpcnsc saings aiiribuiablc io
ihc coris o ihai indiidual or group.
Commission PIans:
Normally associaicd wiih salcs posiiions commissions arc payouis ihai occur
rcqucnily (usually monihly) io cncouragc and rcward a small numbcr o highly
spcciic rcsulis (such as rccnucs gross margin or uniis sold). Commission
paymcnis arc iypically bascd on a spcciic ormula and apply io group o
indiiduals in ihc samc or similar rolcs. Such plans icnd io rcmain airly
consisicni rom onc ycar io ihc ncxi (wiih minor ad[usimcnis as nccdcd)

EmpIoycc $9ock Owncrship PIan:
Lmploycc Siock Owncrship Ilan (LSOI) is an cmploycc bcncii plan. 1hc
schcmc proidcs cmployccs ihc owncrship o siocks in ihc company. Ii is onc
o ihc proii sharing plans. Lmploycrs hac ihc bcncii io usc ihc LSOIs as a
iool io cich loans rom a inancial insiiiuic. Ii also proidcs or iax bcnciis
io ihc cmploycrs.

Organizaiions siraicgically plan ihc LSOIs and makc arrangcmcnis or ihc
purposc. 1hcy makc annual coniribuiions in a spccial irusi sci up or LSOIs.
An cmploycc is cligiblc or ihc LSOIs only aicr hc/shc has complcicd :ooo
hours wiihin a ycar o scricc. Aicr complciing :o ycars o scricc in an
organizaiion or rcaching ihc agc o ::, an cmploycc should bc gicn ihc
opporiuniiy io dicrsiy his/hcr sharc up io :: o ihc ioial


aluc o LSOIs. Law has also proidcd an amcndmcni or ihc cmployccs who
hac aiiaincd ihc agc o oo and ihcir LSOI sharcs arc alloiicd aicr Dcccmbcr
:, :so. 1hc amcndmcni proidcs ihosc cmployccs wiih an opiion io
dicrsiy ihcir sharcs up io :o.
dvan9agcs of EmpIoycc $9ock Owncrship PIan


Disadvan9agcs of EmpIoycc $9ock Owncrship PIan



nccn9ivc for profcssionaI :
Organizaiions ocr hcay inccniics io cxccuiics io rciain ihc ialcnicd
workorcc. 1hc immcnsc compciiiion in ihc markci has orccd ihc
organizaiions io ocr lucraiic compcnsaiion packagcs. Icrormancc bascd
inccniics comcs oui io bc ihc only soluiion or ihc dcmand-supply dispariiy.
Vho works- rcccics ihc apprcciaiion and who docs noi works- lacks bchind.

Inccniics arc morc ccciic in ihc markciing scgmcni as ii rcsulis in morc
and morc salcs. 1hc busincss dcclopmcni cxccuiics siric or morc
inccniics and in ihc cori producc morc busincss and rcccic hcay pcrks.




Pcrformancc Bascd nccn9ivc PIans
1hc righi inccniic plan propcrly implcmcnicd can moiiaic cmployccs, incrcasc
produciiiiy and allow ihc cmploycr io dicrcniiaic pay gicn io high pcrormcrs.
An ariiclc in ihc Hu.uu Bu.:n.. R.:u (March-April :ooo), "cadcrship Tha9
Gc9s RcsuI9s," rcporicd ihai o six lcadcrship siylcs siudicd, ihc usc o rcwards
was ihc singlc highcsi prcdicior o 'organizaiional climaic' and in iurn had a
dircci corrclaiion wiih inancial rcsulis. 'Organizaiional climaic' rccrs io a sci o
mcasurablc propcriics o ihc work cnironmcni ihai arc pcrccicd by ihc pcoplc
who lic and work in ii, and ihai hac inlucncc on ihcir moiiaiion and bchaior.
Climaic characicrisiics ihai hac bccn dcicrmincd io signiicanily impaci a
company's boiiom linc arc. lcxibiliiy, rcsponsibiliiy, siandards, rcwards, clariiy
and icam commiimcni.
Inccniic programs wiih iangiblc, mcmorablc rcwards arc procn cmploycc
moiiaiors. 1hcy boosi salcs, company moralc, and build lasiing bonds bciwccn
you and your cmployccs, cusiomcrs and parincrs. 'Icrormancc Bascd Inccniics'
do much morc ihan 'gic siu away.' Salcs Crcaiors is primarily an inicgraicd
busincss soluiion proidcr, wc dcsign plans io hclp dric pcrormancc by crcaiing
inccniic programs ihai arc cosi ccciic and ihai dclicr ouisianding ROI or
our clicnis.
Icrormancc bascd inccniic programs can bc sci up or ccry diision wiihin a
company. 1his is onc o ihc morc ccciic ways o pcrormancc building and ii
cxplorcs ncw ways io moiiaic your cmployccs io ouipcrorm whilc hac un
doing so. Salcs Crcaiors will build ihc promoiional maicrials or your inccniic
program, sclcci ihc ihcmc and prcparc ihc adminisiraiion iools. Iropcr dcsign
and prcscniaiion will cngagc your cmployccs io gci ihcm cxciicd, and kccp ihcm
cxciicd during ihc inccniic pcriod.


Pcrformancc Bascd nccn9ivc PIans $9ar9 Vi9h a Company's Toughcs9
Objcc9ivcs:
ncrcasing profi9
ncrcasing markc9 sharc
ncrcasc profi9abIc saIcs
cquiring ncw cus9omcrs
Branding your produc9 or scrvicc
mproving cus9omcr scrvicc
$afc9y programs
Cus9omcr buiIding
Rcducc workpIacc 9urnovcr
99cndancc
Grca9cr cmpIoycc mo9iva9ion
ncrcasc produc9ivi9y

No/r///o/ rr /r //c//o o rr

Poin9s program
Ioinis-bascd inccniic programs arc a iypc o program whcrc pariicipanis collcci
and rcdccm poinis or rcwards. Dcpcnding on ihc program iypc and ihc
organizaiional ob[cciics, poinis can bc awardcd on a numbcr o criicria including
posiiic cmploycc bchaior, ihc dcmonsiraiion o organizaiional alucs, rcpcai
cusiomcr purchascs, ihc salc o ncw producis, incrcascd ocrall salcs, or ccn ihc
usc o propcr saciy prccauiions. In addiiion io poini awarding, ihc lccls ai
which poinis can bc rcdccmcd can bc cusiomizcd by ihc organizaiion and sci ai
iriually any lccl. Ioinis programs arc a way or organizaiions io moiiaic
bchaior ocr iimc whilc improing ihc organizaiions` ocrall pcrormancc.

EmpIoycc
Lmploycc inccniic programs arc programs uscd io incrcasc ocrall cmploycc
pcrormancc. Lmploycc programs arc oicn uscd io rcducc iurnocr, boosi moralc
and loyaliy, improc cmploycc wcllncss, incrcasc rcicniion, and dric daily
cmploycc pcrormancc.

Consumcr
Consumcr inccniic programs arc programs iargciing ihc cusiomcrs and
consumcrs o an organizaiion. In a rcccni siudy conducicd by Bain e Company`s
rcscarch, rcscarchcrs ound ihai a simplc : incrcasc in a company`s cusiomcr
rcicniion raics will incrcasc ihc acragc liciimc proiis pcr
cusiomcr.
+
Consumcr programs arc bccoming morc widcly uscd as morc
companics rcalizc ihai cxisiing cusiomcrs cosi lcss io rcach, cosi lcss io scll, arc
lcss ulncrablc io aiiacks rom ihc compciiiion, and buy morc ocr ihc long icrm.

DcaIcr/channcI
Dcalcr inccniic programs arc uscd io improc pcrormancc or dcalcr and
channcl rcscllcrs using salcs inccniic programs. Ii can moiiaic ihc sia which
in iurn only hclps busincss. 1hcsc programs hclp companics capiurc markci
sharc, launch ncw producis, rcducc cosi o salcs, incrcasc produci adopiion, and
uliimaicly dric salcs.

$aIcs
1hcsc programs arc primarily uscd io dric salcs, rcducc salcs cosis, incrcasc
proiiabiliiy, dcclop ncw icrriiory, and cnhancc margins. Salcs inccniic
programs hac ihc mosi dircci rclaiionship io ouicomcs.
A salcs inccniic plan (SII) is a busincss iool uscd io moiiaic and compcnsaic a
salcs procssional (or salcs agcni) io mcci goals or mcirics ocr a spcciic pcriod
o iimc, usually brokcn inio a plan or a iscal quaricr or iscal ycar. A SII is cry
similar io a commission plan, howccr, a SII can incorporaic salcs mcirics oihcr
ihan goods sold(or aluc o goods sold), which is iradiiionally how a commission
plan is dcricd. Salcs mcirics uscd in a SII arc iypically in ihc orm o salcs
quoias (somciimcs rccrrcd io as poini o salc or IOS shipmcnis), ncw busincss
opporiuniiics and/or managcmcni by ob[cciics (MBOs) indcpcndcni aciion o
ihc salcs procssional and is usually uscd in con[unciion wiih a basc salary.
SIIs arc uscd io inccniics salcs procssionals whcrc ioial dollars sold is noi a
prccisc mcasurc o salcs produciiiiy. 1his is usually duc io ihc complcxiiy or
lcngih o ihc salcs proccss or whcrc a salc is complcicd noi by an indiidual bui
by a icam o pcoplc, cach coniribuiing uniquc skills io ihc salcs proccss. SIIs arc
uscd io cncouragc and compcnsaic cach mcmbcr o ihc salcs icam as hc/shc
coniribuics io ihc icam's abiliiy io scll. Ii is noi uncommon or ihc mcmbcrs o
such icams io bc locaicd in dicrcni physical locaiions (oicn working in dicrcni
counirics) and or ihc produci iniroduciion io happcn in onc locaiion and ihc
purchasc o such a produci io occur in anoihcr locaiion.

OnIinc programs
Vhcn irsi cmcrging in :o, ihc usc o onlinc inccniic programs was cxircmcly
rarc. According io ihc Onlinc Inccniic Council (OIC, dcunci), sincc iis
cmcrgcncc, ihc numbcr o onlinc programs has almosi doublcd in sizc ccry ycar.
Ai prcscni, ncarly ccry iradiiional inccniic company ocrs an onlinc
componcni in programs including cmploycc moiiaiion and rccogniiion, salcs
pcrormancc, channcl programs, and consumcr promoiions. Companics ihai run
ihcir programs onlinc cxpcricncc cicicni communicaiion, rcporiing, and awards
ulillmcni. Onlinc inccniic programs posc an aiiraciic alicrnaiic io iradiiional
olinc programs sincc onlinc programs sac moncy and iimc and allow
organizaiions io hac much grcaicr conirol.

Monc9ary rcwards
Sclcciing ihc appropriaic rcwards is iial io any programs succcss. 1hc goal in
choosing rcwards is io sclcci iicms ihai will spark ihc pariicipani`s inicrcsi or
cclings, and suppori ihc program`s ob[cciics. Lcciic rcwards will boih
moiiaic shori-icrm bchaior and proidc moiiaiion ocr iimc. 1hcrc arc
sccral iypcs o rcwards.

Cash
Vhilc inccniic program pariicipanis oicn siaic ihai ihcy prccr cash io non-
cash rcwards, rcscarch has shown ihai cash is a poor moiiaior duc io iis lack o
"irophy aluc." In a rcccni siudy conducicd by ihc Ccnicr or Conccpi
Dcclopmcni, ihrcc o ic rcspondcnis agrcc ihai a cash paymcni is pcrccicd io
bc pari o an cmploycc`s ioial compcnsaiion packagc and noi as pari o an
inccniic program.
o
Addiiionally, cash is quickly orgoiicn as many pariicipanis
icnd io spcnd ii on ccryday iicms or usc ii io pay bills. Gicn ihai mosi pcoplc
do noi gcncrally ialk aboui cash awards, cash programs do liiilc io gcncraic ihc
inicrcsi rcquircd io crcaic an ccciic inccniic program.
Rcscarch shows ihai pay or pcrormancc oicn gics only shori icrm gains,
rcqucnily gics no gains ai all, and may gic rcduccd pcrormancc.

Non-cash rcwards
Mcrchandisc and oihcr non-cash rcwards arc morc oicn pcrccicd as scparaic
rom compcnsaiion. Accordingly, non-cash rcwards icnd io siand oui as rcwards
or pcrormancc, which cnhanccs ihcir long-icrm ccci. Brandcd mcrchandisc and
oihcr non-cash rcwards hac high irophy aluc, bringing grcaicr rccogniiion io
ihc rccipicni ai ihc iimc o ihc award and posscssing a long-icrm lasiing ccci
ihai can rcsuli in incrcascd cngagcmcni in ihc organizaiions goals.

Gif9 cards/ccr9ifica9cs
Gii cards/ccriiicaics arc prcpaid rciail cards or ccriiicaics which arc rcdccmcd
ai a laicr iimc ai chcckoui. In gcncral, ihcy arc aailablc in iwo iypcs. (:) cards
which carry a ma[or crcdii card brand, commonly rccrrcd io as unicrsal gii
cards (UGC), and arc rcdccmablc ai all mcrchanis acccpiing ihc crcdii card brand,
and (:) rciailcr-spcciic cards, issucd by wcll-known mcrchanis, rcdccmablc only
ihrough ihc issuing rciailcr. In ihc :oo: Inccniic Icdcraiion Siudy o
Moiiaiion and Inccniic Applicaiions, gii cards wcrc rankcd as ihc mosi
rcqucnily uscd iypc o corporaic rcward.
s


Mcrchandisc
Mcrchandisc rcwards can rangc anywhcrc rom small brandcd kcy chains io high-
cnd clccironics. In a :oo: siudy conducicd by ihc Ccnicr or Conccpi
Dcclopmcni, o rcspondcnis agrccd ihai morc siimulaiing, mcmorablc
inccniic programs can bc buili around mcrchandisc as opposcd io cash
rcwards.
o


TravcI
1racl rcwards can bcsi bc dcincd as a acc-io-acc ccni dcsigncd io moiiaic,
ciihcr dirccily or indirccily. In a :oo: siudy conducicd by ihc Ccnicr or Conccpi
Dcclopmcni, :: o rcspondcnis pcrccicd ihai iracl is rcmcmbcrcd longcr
ihan oihcr inccniic rcwards.
o


Epcricn9iaI
Lxpcricniial rcwards proidc program pariicipanis wiih an cxpcricncc. 1his orm
o rcward gics organizaiions ihc abiliiy io ocr ihcir cmployccs and cusiomcrs
inicrcsiing cxpcricnccs as inccniics. Lxamplcs mighi includc a scaplanc lighi
and lunch, a iwo hour horsc ridc on ihc bcach, a day o sailing or iwo, a chancc io
mcci a siar aihlcic, or ihc usc o a pariy planncr or an occasion o ihc rccipicni`s
choicc. Lxpcricniial rcwards allow pariicipanis io sharc ihcir cxpcricnccs wiih
oihcrs and rcinorcc ihc rcward and ihc bchaior ihai lcd io ihc giing o ihc
rcward.

Non-monc9ary rcwards
Non-monciary inccniics arc uscd io rcward pariicipanis or cxccllcni bchaior
ihrough opporiuniiics. Non-monciary inccniics may includc lcxiblc work hours,
payroll or prcmium coniribuiions, iraining, hcalih saings or rcimburscmcni
accounis, or ccn paid sabbaiicals. I ii comcs io cnironmcnial bchaior, oicn
labcling and rccogniiion ccriiicaics arc uscd. 1his may includc siickcrs, 1-shiris
wiih banncr logo cic.