Incentive Programs

Naturally, employees feel better about their companies when they believe that they are fairly compensated, but more money will not produce better performance. Money motivates employee only if it is tied directly to performance.

Incentive program is special pay programs designed to motivate high performance. Some programs are available to individuals, whereas others are distributed on a company wide basis. A sales bonus is a typical incentive. Employees receive bonuses when they sell a certain number or certain dollar amount of goods for the year. Employees who fail to reach this goal earn no bonuses.

Some incentive programs apply to all the employees in a firm. Company will distribute bonuses to employees when a company's cost arre reduced through greater work efficiency.