Chapter 4 Research Assignment: Incentive Pay

Incentive Pay
Student’s Name
Institutional Affiliation
Incentive Pay
When organizations consider which type of incentive pay to use, they should consider whether their performance improves through the combined, organization-wide, individual or unit incentive plans. Since employees work as either a unit or individuals, the incentives they receive from their employers play a significant role in improving their overall performance, which translates to an improved organizational performance. Since the performance of an organization depends on the employee interrelationships, I prefer the unit/strategic business unit awards.
The strategic business unit award plan is beneficial to organizations since it ensures that the whole unit performs well. For the group to be awarded, each member has to contribute towards that. This may help those who are not well performers or lack the necessary skills to acquire them from their colleagues. Secondly, the top performers will motivate others in order to get the award.
The strategic business unit award plan gives the employees a sense of ownership where they all work towards a common goal and the award makes them feel like they own the organization. Secondly, it promotes the development of a collaborative culture in the organization. There is enough literature that demonstrates that strategic business units produce better performing teams and individuals since they create a new role of wanting to improve others by foregoing their own interests. In short it crea...