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Popular Incentive Compensation Plans Hourly wages and weekly/monthly salaries are fairly standard and easy for organizations to administer. But these plans alone do not generate a great deal of employee incentive to work hard. This is where incentive compensation plans come in. These plans use various methods to boost employee motivation and overall performance. This activity is important because managers need te understand the characteristics of the best incentive plans if they are to use these plans to generate employee motivation and performance The goal of this exercise is to challenge your understanding of the different types of popular incentive compensation plans. First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful--not all of the terms will be dragged to the figure. An employee-owned supermarket incentivizes its workers by promising to give 10 percent of the company's annual pretax profits back to them. Back More Vehicle Goal Results Earn Percentage Results Earn Generate | Right Awards ards | share Share | Roduce Reduce | Obtain Obtain Generate Right Characteristics First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. High school teachers who have a Master's degree earn more than high school teachers who only have a Bachelor's degree. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. An auto salesperson receives a 25 percent commission on each and every vehicle he or she sells. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. If an employee reaches a certain goal, the employee is able to earn an additional $10,000 at the end of the year in addition to his or her normal salary. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful not all of the terms will be dragged to the figure. This plan bases your pay on your actual work results. It is also known as merit pay. Back Back More More Vehicle Vehicle Goal Results Earn Results Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. This plan ties employee compensation to the number of degrees or job-relevant skills each employee earns. It is also known as skill-based pay. Back More More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful--not all of the terms will be dragged to the figure. In this plan, the company distributes a percentage of its profits to employees. Back More Vehicle Goal Goal Rosults Results Earn Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. This plan uses cash awards on top of an employee's regular salary for achievement of specific objectives Back More Vehicle Goal Results Results Earn Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. This plan asks employees to share their job profits with the organization. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. This plan distributes savings to groups of employees who helped to reduce the organization's costs and increase its productivity. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. With this plan, employees are motivated to work harder to increase the company's stock price so that they can obtain it at a cheaper price. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful--not all of the terms will be dragged to the figure. A company wants to be more efficient, so it has a team of workers generate a plan to cut costs and increase productivity. The team is promised a reward of 50 percent of any cost savings their plan generates. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful not all of the terms will be dragged to the figure. A company gives its executives the right to purchase 500 shares of company stock at a future date for a discounted price. Back More Vehicle Goal Results Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge First, hover over each term to read a short description. Then, click and drag the terms to indicate which type of incentive compensation plan the description best represents. Careful-not all of the terms will be dragged to the figure. With this plan, employees are paid for having certain personality characteristics. Back More Vehicle Vehicle | Goal Goal Results Results | Earn Earn Percentage Awards Share Reduce Obtain Generate Right Characteristics Pay for Performance Bonuses Profit Sharing Gainsharing Stock Options Pay for Knowledge