Question

Mr. Talib & Mr. Tariq both are business partner. Mr. Tariq look after the U.K. business operations. Mr. Talib is taking care of Oman business operations. In their factory there are four departments like Material Department, Finance Department, Research and Development Department, Production Department etc. To motivate employees, they decided to offer group incentives. You have to suggest suitable group incentive plan to respective department. Additional Information - As per business policy they do not offer cash as motivation source to employee. You also need to suggest non-monetary motivational choices to Mr. Talib. (1 Mark) (Total 4+1 = 5 Marks)

Answer 1

Group incentive programs are award programs that deliver lump–sum cash payments, time–off awards, and/or informal recognition items to groups of employees who meet or exceed pre–established levels of organizational performance. Designing effective group incentive programs can be key to achieving organizational goals.

There may be different schemes for paying group incentive , some of these are discussed as follows:

1- Priest man’s plan:

A standard production is fixed for the whole enterprise under this plan. If productivity exceeds the standard then bonus is paid in accordance with the increase. In case production does not reach the standard then workers get minimum wages only. For example, a standard production of 200, 000 units is fixed for the year. Actual production during the year is 240,000 units since production has gone up by 20% workers will get 20% higher wages as bonus.

The workers get sufficient incentive to raise their performance. A team spirit is visible among the workers because production will increase with the collective efforts of various limbs of the organization.this plan is best for production department

2. Scalon plan:There is a payment of one percent participating bonus for every one percent increase in productivity under this plan. The bonus is available to all workers except top management.

3. Co-partnership:

The employees are offered shares of the enterprise at reduced rates in this plan. The payment is also collected in installments. The employees share profits of the enterprise as its members. The underlying idea of this method is to make workers feel as a part of the organization

4. Profit sharing:

When shareholders share profits for contributing towards capital then workers should also get a part of profits for contributing their labour. The workers are an integral part of any organization and their contribution to its prosperity should also be rewarded by making them the recipients of profits.

Non-monetary incentives are designed to recognize a special achievement or the completion of something that enhances an employee's job performance or value to a company.

• Healthcare benefits.
• Life insurance.
• Promotion.
• Charitable donations made in an employee's name.*
• Concert tickets.
• Gift cards.
• Luxury gifts, such as designer clothing, watches and laptops.
• Vacation packages, including airfare and accommodation
• Vehicle or vehicle allowance