Question

Describe the difference between individual and group incentive plans.

Do you feel group incentive plans are beneficial to the company and/or the employees involved?

Answer 1

The difference between individual and group incentive plans is that Individual incentive plans involve payment of incentives or rewards to workers/employees based on their individual performance. On the other hand, Group incentive plans involve payment of incentives or rewards based on the overall performance of group in an organization. In this plan, all incentives or rewards are distributed fairly/equally among team members.

Individual incentive plans are based on two factors output based and time based. for example- If worker produces more tha set output standard then they are paid incentives based on output. Under time based type, Workers need to achieve their targets or complete thier job before standard time.

On the contrary, group incentive plans are based more on Time based system not on output based. group of employees like project team will be awarded if they achieve their target or complete project before or on standard time.

Under Individual incentive plans, Time based plans are Hasley's plan,Rowan incentive plan,Bedeaux Incentive Plan.and emerson efficiency plan. Output based plan are-Taylor’s differential piece rate system,Merrick’s multiple piece rate plan and Gantt’s task and bonus wage plan.

group based incentive plan types are Priestman’s Plan.and Scanlon’s Plan.

I feel that Group incentive plans are beneficial to the company not to the employees involved because Group incentive plans increase performance of groups and help company to achieve their goals but  group incentive plan may look unfair and unjust to employees who show high performance but rewards are distributed equally to high performing employees as well a poor performing ones in the group.

for example- three group of sales people were assigned to achieve sales target for the next month and will be given bonus cash and free trip to the winning group.All three teams focused on winning that bonus and free trip. all three groups have some employees who were lazy and were not supportive at all. in the end company gain more sales and profitability due to high performance of all three groups but in the end Group B won the bonus and trip plan which needs to be distributed equally. It cause issues and problem in employees of that group who have shown high performance, gave all efforts but employees who were lazy and not supportive also get to win bonus and free trip even after thier poor performance.