incentive wage plan

7/31/2019 Incentive Wage Plan

1/31

INCENTIVE WAGEPLAN & RETIREMENT

BENEFITSPRESENTED BY :-

ARADHANA BHARIYAPOONAM SAHU

PRIYANKA BHATTACHARY


2/31

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.


3/31

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.


4/31

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.


5/31


6/31

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.


7/31


8/31

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


9/31

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.


10/31

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.


11/31

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.


12/31

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.


13/31

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]


14/31

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.


15/31

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.


16/31

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.


17/31


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.


18/31


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.


19/31

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.


20/31

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.


21/31


GAIN SHARING PLAN

1. Saving in labour cost;

2.

Bonus is paid half-yearly;3. Percentage of the foreman is fixed in

advance.


22/31


GOAL SHARING PLAN

1. Rewarding employees;

2.

achieve target;3. job performance;

4. Quality, service etc.


23/31


24/31

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.


25/31


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.


26/31


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.


27/31

RETIREMENT BENEFITS

AT THE AGE OF 65 A NORMAL PERSONGET RETIRED.

THE MAJOR RETIREMENT BENEFITS

ARE:-

1. SOCIAL SECURITY

2. PENSION PLANS


28/31

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


29/31

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


30/31

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


31/31

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

incentive wage plan

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