Performance Management Systems and Strategies

INCENTIVE SCHEMES

Incentives are paid to the workmen over and above the normal wages to reward their good performance. In places, where piece-rate system of wages exist, payment of incentives is relatively simple as for manufacturing additional units than the standard one, workers can be paid extra wages, which they are supposed to get for each additional unit. This incentive scheme is known as straight piece-rate scheme. In time-rate system, however, such incentives are computed following standard hour systems. To illustrate, let us assume a given volume of job is given to a worker for standard 8 hours work. If the worker is able to complete the job within 6 hours, then for the hours saved, i.e., 2 hours, he/she should be given the incentives ...