Question

"Incentive Pay Programs" Please respond to the following:

Analyze the advantages of person-focused and job-based pay plans to determine which would be least preferable for companies in the technology industry. Explain your rationale.

Discuss at least (2) two disadvantages associated with team-based incentive pay plans. Provide examples to support your rationale.

Answer 1

The advantages of person- focused pay programs are-

1. Job Security - It creates more flexible workers who can use their skills elsewhere when sales are less and business is in decline.
2. Better Quality Work - The employees are more productive and are therefore able to increase their work quality. This leads to optimum usage of staff as much as needed.
3. Better workplace - The job environment becomes more motivating and interesting for the employees.

The advatages of job-based pay are

1. Offers employees a planned structure and a more predicatble method of payment i.e. on the basis of seniority
2. It is easier to chalk up the company budget and plan for raises each year.
3. More convenient as no work is required to gauge knowledge, skill and competenices of other employees.

A person focused job pay plan would be more suited to the technology industry as skill annd competency are not defined by seniority and flexibility of workers who have varied skills and can fill up varied positions is very important.

Disadvantages of team based pay:

1. Not all members contibute equally in a team and this would increase the difficulty of renumeration.

2. If everyone in a team is working toward different goals, a disjointed team would be produced which will not help the organization.