Incentive Wage Plan
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Transcript of Incentive Wage Plan
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7/31/2019 Incentive Wage Plan
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INCENTIVE WAGEPLAN & RETIREMENT
BENEFITSPRESENTED BY :-
ARADHANA BHARIYAPOONAM SAHU
PRIYANKA BHATTACHARY
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INCENTIVE WAGE PLANS ATTEMPT AT
LINKING REWARDS TO PERFORMANCE
ENHANCE PRODUCTIVITY. THEY RESULT
IN CERTAIN BENEFITS LIKE
1) ALIGMENT BETWEEN ORGANISATION
AND EMPLOYEES OBJECTIVES,
2) WAGES GET RELATED TO OUTPUT,
3) UNIT LABOUR COST ARE REDUCED.
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BENEFITS OF INCENTIVE COMPENSATION
ALIGMENT BETWEEN ORGANISATIONAND EMPLOYEES OBJECTIVES.
WAGES GET RELATED TO OUTPUT.
UNIT LABOUR COSTS ARE REDUCED.
NEED FOR LESS SUPERVISION.
GOOD HUMAN RELATIONS. ATOMSPHERE OF COOPERATION.
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LIMITATION OF INCENTIVE COMPENSATION
LACK OF RECEPTIVE ATTITUDES ON THEPART OF THE MANAGEMENT AND THEEMPLOYEE.
LACK OF PROPER MANAGEMENTPRACTICES.
LEADS TO INEQUITIES IN THE WAGE
STRUCTURE.
ADMINISTRATIVE COST.
LIMITED APPLICATION.
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GUARANTEE OF MINIMUM WAGEPAYMENT.
SIMPLICITY.
DEFINITENESS BY SPECIFYING CLEARBENEFITS TO THE WORKERS WHICH
ARE NOT SUBJECT TO TOO MANYCHANGES.
WIDE COVERAGE.
NO UPPER LIMIT BE FIXED ONINCENTIVE EARNING.
RELATINSHIP BETWEEN LABOUR
COST &TOTAL COST.
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INCENTIVEPLAN
TIMEWAGE
PIECEWAGE
WAGE
INCENTIVE
GROUPINCENTIVES
ORGAN.WIDE
INCENT.
INDIVIDUAL
INCENTIVES
BASED ONTIME
BASED ONPRODUCTIVITY
TAYLORPLAN
MERRICKPLAN
GANTT PLAN
HALSEYPLAN
ROWANPLAN
EMERSON
PLAN
BEDEAUX
PLAN
PRIEST.PLAN
GAINS P
GOALS P
SCANLONPLAN
PROFITSHARING
ESOP
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TIME WAGE
When the employees are paid according totime spent by them in the organization.
It is simple to calculate & provides minimumguaranteed wages.
Quality of product is maintained & lesswastage of resources.
No extra benefit offered to workers & workersdevelop the tendency to go slow.
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PIECE WAGE
The workers are paid according to thenumber of units produced by them.
Quantity is more important then the quality.
Simple & easy to calculate, high target ofproduction to increase their earning.
It affect the health of employees, due toanxiety of earning more.
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INDIVIDUAL INCENTIVE PLANS
Earning are directly related to theperformance of the individual employee.Individual incentives may be based on time
or output.
In output based plans, a standard of output isdetermined & an employee producing more
than the standard output is given incentive.
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BASED ON TIME
HALSEY PREMIUM PLAN
1. These plans are very simple to understandand operate & also saving time.
2. Minimum wages is assured to every worker.
3. It may lead to deterioration in quality.
4. The standard time may not have beenproperly fixed.
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BASED ON TIME
ROWAN BONUS PLAN
1. It is similar to halsey plan except thecalculation of bonus. Here bonus iscalculated by taking proportion of timesaved to standard time.
Earning=Hours worked*rate per hour+[time
saved/standard time*hour worked*rate perhour]
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BASED ON TIME
BEDEAUX PLAN
1. In this plan, standard time is expressed inminutes and are known as Bs.
2. This method is an improvement overprevious plans as higher degree of precisionis involved but at the same time, it is costlier
to operate and difficult to understand.
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BASED ON TIME
EMERSON PLAN
1. This plan is similar to gantts task and bonusplan and is an improvement over the taylorsdifferential piece rate plan.
2. Conditions of work are standard output isfixed which is to be completed within a
specified period of time.
3. Earning scope is more for efficient worker.
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BASED ON PRODUCTIVITY
TAYLOR PLAN
1. The lower rate for those workers who fail tocomplete the standard task within theallotted time and the higher rate for thosewho complete the task within or less thanthe standard time.
2. Provide sufficient incentives to worker toincrease their efficiency.
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BASED ON PRODUCTIVITY
MERRICKS MULTIPLE PIECE RATE PLAN
1. Merricks plan is an improvement over
Taylor's plan.
2. One of the limitation is wide gap in slabs.
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BASED ON PRODUCTIVITY
GANTT TASK AND BONUS WAGE PLAN
1. Standard time for every task is fixed throughtime and motion study.
2. Minimum time wage is guaranteed to allworkers.
3. Wages increase progressively with increasein efficiency, and at the same time inefficientworkers are not penalized severally.
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GROUP INCENTIVE PLAN
Under these plans, bonus is calculated for agroup of workers and total amount isdistributed among the group member.
Possess similar skills and abilities;
Distributed in proportion to the basic rates;
Paid bonus on a specified percentage basis.
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GROUP INCENTIVE PLANS
PRIESTMANS PLAN
1. Team spirit among the group member;
2.
Number of workers in the group of small;3. No distinction is made between efficient and
inefficient workers;
4. No regard is paid to efficiency of theindividual.
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GROUP INCENTIVE PLANS
GAIN SHARING PLAN
1. Saving in labour cost;
2.
Bonus is paid half-yearly;3. Percentage of the foreman is fixed in
advance.
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GROUP INCENTIVE PLANS
GOAL SHARING PLAN
1. Rewarding employees;
2.
achieve target;3. job performance;
4. Quality, service etc.
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ORGANISATION-WIDE INCENTIVE PLAN
SCANLON PLAN
1. Increase productivity and to reduce costs;
2.
Committees are set up to evaluateemployees suggestions;
3. Improving work methods.
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ORGANISATION-WIDE INCENTIVE PLAN
PROFIT SHARING
1. Paid out of net profits;
2. The extra payment given to workers;
3. Profit sharing on cash basis only;
4. Improve quality of product;
5. Improve employee morale.
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ORGANISATION-WIDE INCENTIVE PLAN
EMPLOYEE STOCK OPTION PLANS
1. It offers an option to the employees topurchase a certain amount of shares;
2. Intend to procure and hold talent employeesin company;
3. Creates mutuality interest;
4. Voluntary in nature.
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RETIREMENT BENEFITS
AT THE AGE OF 65 A NORMAL PERSONGET RETIRED.
THE MAJOR RETIREMENT BENEFITS
ARE:-
1. SOCIAL SECURITY
2. PENSION PLANS
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SOCIAL SECURITY THIS BENEFITS ARE PAYABLE ONLY IF
THE EMPLOYEE IS SECURED UNDERTHE SOCIAL SECURITY ACT. FEDERALPROGRAM THAT PROVIDES 3 TYPES OF
BENEFITS:RETIREMENT INCOME AT THE AGE OF 62
AND THEREAFTER.
SURVIVORS OR DEATH BENEFITSPAYABLES TO EMPLOYEESDEPENDENTS REGARDLESS OF AGE ATTHE TIME OF DEATH.
DISABILITY BENEFITS ARE PAYABLE TO
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PENSION PLAN PLANS THAT PROVIDE A FIXED SUM
WHEN EMPLOYEES REACH APREDETERMINED RETIREMENT AGE ORWHEN THEY CAN NO LONGER WORK
DUE TO DISABILITY.
CONTRIBUTORY Vs.
NONCONTRIBUTORY
QUALIFIED Vs. NON QUALIFIED PLANS
DEFINED CONTRIBUTION Vs. DEFINED
BENEFIT PLAN
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DEFINED BENEFIT PENSION PLAN:-
A PLAN THAT CONTAINS A FORMULA
FOR DETERMINING RETIRE BENEFITS.DEFINED CONTRIBUTION PENSION
PLAN:-
A PLAN IN WHICH THE EMPLOYERSCONTRIBUTION TO EMPLOYEESRETIREMENT SAVING FUND ISSPECIFIED.
EG. 401(K) PLAN (INTERNAL REVENUECODE)
SAVING & THRIFT PLAN:-
PLAN IN WHICH EMPLOYEES
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DEFERRED PROFIT SHARING PLAN :-
A PLAN IN WHICH A CERTAIN AMOUNT OFPROFITS IS CREDITED TO EACH EMPLOYEES
ACCOUNT, PAYABLE AT RETIREMENT ,TERMINATION OR DEATH.
ESPO
A QUALIFIED, TAX-DEDUCTIBLE STOCK BONUSPLAN IN WHICH EMPLOYERS CONTRIBUTESTOCK TO ATRUST FOR EVENTUAL USE BYEMPLOYEE.
CASH BALANCE PLAN:-
DEFINED BENEFIT PLAN UNDER WHICH THEEMPLOYER CONTRIBUTES A % OF EMPLOYEE;SCURRENT PAY TO EMPLOYEES PENSION PLANS