Hr Pay for Performance: Individual Employee Incentive and Recognition Programs

Individual Employee Incentive and Recognition Programs

Empire State College

Course: Pay for Performance

Fall 2014

        Employers are always looking for ways to motivate and incentivize their employees.  There are several different ways to achieve this.  However, we need to keep in mind that each individual incentive and recognition program has its pros and cons.  Not all of these work for each person since our personalities, likes and dislikes are so diverse.

        Piecework is one of the ways to have an individualized incentive plan.  This does not work for everyone.  Should an employee not be a risk-based individual willing to work per piece rate, this might not work out for them.  An industrial engineer figures out the cost per piece based on based on a production standard per hour.  This plan will set the rate per piece and the above normal increased rate for exceptional piece work. Straight piece work is where each item is prorated to a particular amount, such as 35 cents per item.  When the worker goes higher than the amount projected to produce per hour, anything above that can be increased for example to 40 cents an hour.  This confirms to the employee through their concerted efforts, they can receive a higher pay.

        Standard hour plans are similar to the piecework plans. The only exception is instead of receiving per piece above the standard production, they receive a premium which is a percentage equal to the amount over the set standard.   This formula “… also eliminates the need to recalculate piece rates whenever hourly wage rates are changed” (Dessler, 2013, p. 396).          

There are pros and cons to piecework.  As employees attempt to increase output to increase their wages, the quality of the items can be downgraded.  Inferior products do absolutely no good for either the employer or the consumer.  Also a worker might not want to change to a machine or a production line they are not used to since it could reduce their production resulting in less pay.  An employer could find resistance to change by the employee when trying to upgrade their machinery or their technology because the employee fears losing income for fewer pieces produced.

 In fact, I recently had this conversation with my brother, David.  He does machine work at a manufacturing plant in Tonawanda.  Recently they were changing procedures and were attempting to communicate the way the employer wanted these changes to be implemented. However, due to a combination of the resistance of the workers, lack of new training, and a miscommunication, the piece work was of low quality and resulted in major waste to the company.  David told me they then had to revamp their process to achieve the needed results. When I asked how he is paid, he explained the standard hour plan as listed in our text book on page 396.