Question

Unlike individual incentive programs, group and companywide incentive programs reward individuals based on the group and companywide performance standards, respectively. Under group and companywide incentive programs, it is possible for poor performers to benefit without making substantial contributions to group or company goals. What can companies do to ensure that poor performers do not benefit?

Answer 1

An incentive plan can provide employees with the motivation to contribute to the company’s main objectives and strategies. Most incentive programs are based on job category, length of service, job classification, a main goal, and what the payout will consist of. These bonuses could include an annual incentive plan, discretionary bonuses, spot awards, profit-sharing, gain-sharing, group incentives, retention bonuses or project bonuses. In particular, a group incentive plan focuses on the performance of a small group, usually a work team. These programs often are used when measurable output is the result of group effort and it is difficult to separate individual contributions (SHRM, 2018).

This type of incentive program can provide many positives and negatives in the workplace. First, when individuals work together and have the motivation to succeed throughout all objectives of a project, a group incentive plan will offer individuals a bonus for their hard work as a team. But, if a few individuals slack during the group project, other employees are working harder while they are all paid the same amount in bonuses. In my opinion, each group member should obtain a performance review within the group to provide an accurate calculation of disbursements of the bonus. For example, if one individual has completed a large amount of work while other individuals have not, the individual that has carried the wait of the project would be paid more than then others.

Altogether, I do not feel that group incentive plans are a great way to motivate employees. I feel that someone will always do more work than others and it wouldn’t be fair to compensate everyone based on the amount of work that one person has completed. If it is a group project and the incentive is based on group pay, I would make sure that all objectives and strategies that need to be completed are adequately distributed fairly for all individuals within the group.