State:
Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Cost Per Hire Calculator
This handy calculator lets you plug in your expenses for recruiting, benefits, salaries, and more.

Graphs automatically generate to show you your annual cost per hire and a breakdown of where you are spending the most money.

Download Now!
April 17, 2010
Compensation 101: Individual Versus Group Incentive Plans

Individual incentive plans and group incentive plans both have a similar goal. They strive to provide an incentive that will drive the right kind of performance for the company. For the company to determine the best incentive options, they must first know their goals and ensure those goals are within the individual's ability to impact. In a BLR webinar titled "Compensation 101: Essential Secrets and Strategies for HR Professionals," Paul R. Dorf outlined some of the considerations when determining whether individual or group incentive plans are most appropriate.

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

Individual incentive plans are based on meeting work-related performance standards, such as quality, productivity, customer satisfaction, safety, or attendance. They are most appropriate when:

  • Performance can be measured objectively
  • Employees have control over the outcomes
  • Plan does not create unhealthy competition

Individual incentive plans require monitoring, and it is important to remember that the incentive scheme is not a substitute for good management.

Spot bonuses can also be used for individuals to show appreciation or give recognition for a job well done. This can be a reward for developing new skills, contributing new ideas, obtaining licenses, or finishing projects early. Typically, a spot bonus is given as a one-time discretionary payment. These are most prevalent among non-executives.

Team or group incentive plans are a reward for collective performance. These are most effective when all group members have some impact on goals. The rewards can be equal or different for each member, but this requires an understanding of team dynamics. Be sure to avoid contrasting motivational forces.

Paul Dorf is the Managing Director of Compensation Resources, Inc. (CRI). CRI (www.compensationresources.com) specializes in providing comprehensive Compensation and Human Resource consulting services. Dorf is responsible for directing consulting services in all areas of executive compensation, short and long term incentives, sales compensation, performance management programs, and salary admin programs.

Featured Free Resource:
Cost Per Hire Calculator
   
   
 
 
Twitter  Facebook  Linked In
Follow Us
CT-WEB01
Copyright © 2016 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on http://Compensation.BLR.com
Document URL: http://compensation.blr.com/Compensation-news/Compensation/Compensation-Administration/Compensation-101-Individual-Versus-Group-Incentive/