$1.$ Strategic Incentive Plans

For each plan component listed, identify the relevant type of incentive plan.

Plan Component

Type of Incentive Plan

Bonus merit pay

Lump sum merit pay

Professional employee incentives

Sales incentives

Executive incentives

Profit sharing

Team compensation

A large consumer product firm$$s goal is to deliver low$-$cost$,$ high$-$quality products. Their pay$-$for$-$performance plan offers incentives to employees who meet their product launch dates. Unfortunately, though sale are high, the company is experiencing financial difficulties. What is the most likely reason for the financial woes?

The plan focused on individual, not group performance.

The plan did not tie incentives to organizational objectives.

The plan is unclear and difficult to measure.

The plan failed to consider the effects of external elements, like customers.

To establish meaningful performance measures, the measures$$at all organizational levels$$must be consistent with the: goals of the organization.

For several years, Elyse has managed five employees. Some have been more successful than others. Because she genuinely likes them all, Elyse has always rewarded each employee with the same bonus each year. Recently, Elyse has noticed that her star performers are starting to slack and don$$t seem concerned when she reminds them of their organizational goals. What mistake has Elyse most likely made?

The group$$s pay incentives have become pay guarantees and are no longer motivating.

The group$$s pay incentives are not high enough to be motivating.

Elyse is using group rewards instead of individual rewards.

Elyse allowed poor performance to go unrewarded.