In order for these plans to be efficient they must be effective. There are a few questions that the Human Resource Manager can ask in order to measure how effective the plan is; is it relevant?, is it controllable, and is it measurable? To begin, it is important to determine if the plan is relevant to the health of the business (“Four Tests”, 2016, para.3). You want to consider how it will, both negatively and positively, impact the business as a whole and determine which impact outweighs the other. The second aspect that is important to consider, is if the employee is capable of controlling the outcome on their own accord. If it isn’t possible for them to control it, the Human Resource Manager may want to reconsider the plan. Employees wat to be able to achieve the goals on their own accord, if they can’t do this, the plan is no benefit to them which will lead to the awards being unused. On top of all of that, you want to ensure that the plan is able to be measured. Ensuring that the plan will be able to be tracked but the Human Resource department is very important. If you lose track of the incentives given, it may lead to a deficit in mone...
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...siness analysis, it may be more difficult. This is because in sales, you can reward employees based solely off of numbers. However, with a position like a business analyst, employers would have to develop an efficient rating system based off of many different aspects of the job (i.e. stakeholder relationships, knowledge, and innovation).
Pay-for-performance plans have disadvantages such as measurability, lessened quality of work, lack of team work and appeal that both the employees and employers must consider before deciding to use the incentive program. However, if the company decides to implement the plan they must ensure that it is measurable, controllable and relevant. If they can successfully achieve this, the incentives such like cash bonuses, company stock and profit sharing are definitely bonuses for the employee which, in turn, is a bonus for the employer.
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