71-342: Compensation Management

Chapter 5 &11

Performance Pay Plans

71-342: Compensation Management

Types of Performance Pay Plans

Individual
Group
Organization

71-342: Compensation Management

Individual Performance Pay Plans

Piece rate
Straight piece rate
Differential piece rate

Commission
Merit pay
Raise
Bonus

Special purpose incentives

Incentive for attendance
Incentive for creativity

71-342: Compensation Management

Group Performance Pay Plans

Gain sharing plan
Scanlon
Rucker

Issues in designing gain sharing plan

Defining baseline
Deciding the share & split
Establishing the bonus formula
4

71-342: Compensation Management

Organization Performance Pay Plans

Profit sharing plan
Current distribution plan
Deferred profit-sharing plan
Combination plan

Employee stock plan

Stock bonus plan
Stock purchase plan
Stock option plan
5