Performance Based Incentives

7/28/2019 Performance Based Incentives

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Who doesnt want to attract, hire and retain the besttalents of the industry? Why not explore the new waysto foster employee motivation and drive them to

achieve their targets then?

After all an organizations performance is directlyrelated to the performance of its human

resources.


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PERFORMANCE

The accomplishment of a given task measured against

preset known standards of accuracy, completeness,cost, and speed. In a contract, performance is deemedto be the fulfillment of an obligation, in a manner thatreleases the performer from all liabilities under the

contract.


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INCENTIVESA thing that motivates or encourages one to do

something.

Incentive pay, also known as "pay for performance"is generally given for specific performance resultsrather than simply for time worked.


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TYPES OF INCENTIVES

1.Material incentives: tangible rewards oftenmonetary -- wages, fringe benefits, patronage.

2.Solidary incentives: intangible rewards from theact of association -- sociability, status, identification

3.Purposive incentives: intangible rewards related tothe goals of the organization --- e.g., working on anelection of a supported candidate


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Despite the fact that U.S. organizations spend over

$100 billion annually on incentive programs, manybusiness people question their effectiveness. Now, aground-breaking study proves that incentiveprograms can boost performance by anywhere from

25 to 44 %, but only if conducted in ways thataddress all issues related to performance and humanmotivation. The study found that mostorganizations lack the knowledge or will to createproperly constructed programs that yield desired

results.


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The study was designed to help answer these four

questions:

Do incentives increase work performance (and underwhat circumstances)?

Which incentive programs are most effective?

What types of organizations need incentives?

And what model best expresses how to select andimplement successful programs?


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Five conditions under which incentive programs work best:

Current performance is inadequate.

The cause of the inadequate performance is related todeficiencies in motivation.

The desired performance type and level can be quantified.

The goal is challenging but achievable.

The focus on promoting a particular behavior does notconflict with or override everyday organizational goals.


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To help companies develop effective incentive programs, theresearchers identified an eight-event PIBI (PerformanceImprovement By Incentives) Model. It specifies the humanissues relevant to performance, provides guidance on the step-by-step procedures of implementation, and allows decision-makers to troubleshoot and correct the system if it fails to

yield desired results.


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PIBI S EIGHT PARAMETERSASSESSMENT

PROGRAM SELECTION

WORK VALUE ESTABLISH TRAINING AND COMMUNICATION

SUPPORT

EMOTIONAL APPEAL

MEASUREMENT

ANALYSIS AND FEEDBACK


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PERFORMANCE BASED INCENTIVE INPRIVATE FIRM


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TATA CONSULTANCY SERVICES Tata consultancy services is a global IT services,

business solution, outsourcing company.

Second largest India based BPO services Ranked #20 in the list of top companies in, Fortune

500 magazine.

142 offices across over 32 countries and generates about

30% of Indias IT export.


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Incentive Plan at TCSTangible Benefits:

Annual Bonus Plan

Short-term Incentive Plan

Long-term Incentive Plan

Equity Incentive Plan

In tangible:

Project milestone partiesRecognition of star performer

On the Spot recognition


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PERFORMANCE BASED INCENTIVE INGOVERNMENT


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Performance Related Incentive Scheme

(PRIS) for Central GovernmentEmployees

It's welcome that the government is finally doingsomething to bring its work structures more in linewith the modern principle of incentive-basedperformance. Called the Performance Related

Incentive Scheme (PRIS),


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PRIS as per Sixth Pay Commission

recommendations"Government of India has accepted in principle therecommendation of the Sixth Pay Commission forintroduction of a Performance Related Incentive Scheme

(PRIS) in the form of pecuniary benefit over and aboveregular salary, based on the targeted performance andperformance parameters, out of the Non-Plan budgetarysavings, for the Central Government employees," Minister

of State for Personnel V Narayanasamy told Lok Sabha in awritten reply.


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Performance Related Incentive SchemeThe incentive will be based on the departments scorecardin meeting yearly targets committed by their respectivesecretaries and ministers as part of the results-framework

documents (RFD) system.The committee of secretaries looking into performance-based incentive for government employees is said to havealready zeroed in on a formula that offers a secretary-level

officer an incentive up to 40% of the basic salary, providedhis department has met 100% RFD targets. A scorecard of70% and less in meeting RFD targets would however attractzero incentive. However, no penalty will be imposed on thenon-performing officers.


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A simple logic; if you make theirday, they make your organization.


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THANK YOU

Documents

Performance Based Incentives