Improve productivity by analyzing and establishing workflows.
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Financial Incentives
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Financial rewards paid to workers whose production exceeds some predetermined standard
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Productivity
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The ratio of outputs(goods and services) divided by the inputs (resources such as labor and capital)
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Fair day's work
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Output standards devised based on careful, scientific analysis
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Scientific management
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Management approach based on improving work methods through observation and analysis
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Intrinsic Motivation
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Motivation that derives from the pleasure someone gets from doing the job or task
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Expectancy
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A person's expectation that his or her effort will lead to performance
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Instrumentality
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The perceived relationship between successful performance and obtaining the reward
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Valence
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The perceived value a person attaches to the reward
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Behavior Modification
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Using contingent rewards or punishment to change behavior
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Variable Pay
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Any plan that ties pay to productivity or profitability, usually as one-time lump payments
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Piecework
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A system of pay based on the number of items processed by each individual worker in a unit of time, such as items per hour or items per day
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Straight Piecework
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An incentive plan in which a person is paid a sum for each item he or she makes or sells, with a strict proportionality between results and rewards
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Standard Hour Plan
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A plan by which a worker is paid a basic hourly rate but is paid an extra percentage of his or her rate for production exceeding the standard per hour or per day. Similar to piecework payment but based on a percent premium
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Merit pay (merit raise)
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Any salary increase awarded to an employee based on his or her individual performance
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Annual Bonus
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Plans that are designed to motivate short-term performance of managers and which are tied to company profitability
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Stock Option
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The right to purchase a stated number of shares of a company stock at today's price at some time in the future
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Golden Parachute
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A payment companies make in connection with a change in ownership or control of a company
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Team (or group) incentive plan
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A plan in which a production standard is set for a specific work group, and its members are paid incentives if the group exceeds the production standard
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Organization-wide incentive plan
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Incentive plan in which all or most employees can participate
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Profit-sharing plan
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A plan whereby employees share in the company's profits
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Scanlon plan
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An incentive plan developed in 1937 by Joseph Scanlon and designed to encourage cooperation, involvement, and sharing of benefits
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Gainsharing Plan
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An incentive plan that engages employees in a common effort to achieve productivity objectives and share the gains
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Earnings-at-risk pay plan
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Plan that puts some portion of employees' normal pay at risk if they don't meet their goals, in return for possibly obtaining a much larger bonus if they exceed their goals
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Employee stock ownership plan (ESOP)
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A corporation contributes shares of its own stock to a trust in which additional contributions are made annually. The trust distributes the stock to employees on retirement or separation from service.
