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Incentive Plans Paper

1317 words - 5 pages

The word incentive can have two separate meanings. One is in the form of a noun, "something, such as the fear of punishment or the expectation of reward that induces action or motivates effort" (Houghton Mifflin Company, 2000). The second meaning is in an adjective form, "serving to induce or motivate: an incentive bonus for high productivity" (Houghton Mifflin Company, 2000). In every company it is beneficial to the ultimate growth and output of the business to be able to not only provide individual employees with hourly compensation for his or her work, but offer incentives that assist in making the business even more successful. By gifting associates with outside motivation this causes employees to go above and beyond their specific position in an effort to achieve that recognition or additional reward for their exertion. Focusing on a multibillion dollar corporation such as Wal-Mart, who offers incentives that keeps their employees working much further than their title in the company and motivates them to work as a team. As Sam Walton the founder of Wal-Mart once said about rewarding his employees "In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations" (Walton, 2005).If an employee is shown appreciation by the employer a bond is made and therefore, a commitment is formed. Incentives are a method of a payment appreciation shown by the employer to the employee. According to Noe, Hollenbeck, Gerhart, and Wright 2007 "Pay is a powerful tool for meeting the organization's goals. Pay has a large impact on employee attitudes and behaviors. It influences which kinds of employees are attracted to (and remain with) the organization. By rewarding certain behaviors, it can align employees' interests with the organization's goals." Incentives can be a good form of competition between employees. Even though coworkers may compete with each other, incentive pay can motivate employees to want to improve their performance in the workplace in doing so the organization meets its objectives. This paper will examine how the organization incentive plans relates to organization objectives, and will evaluate how the incentive plans do, or do not, help the organization to achieve its goals and objectives.For incentive pay to motivate employees to contribute to the organization's success, the pay plans must be well designed, and employees must also believe they have the ability and resources to meet the performance standards. For rewards to be motivating, employees have to believe they can earn them. (Noe, Hollenbeck, Gerhart, & Wright 2007). Wal-Mart encourages their employees to be merchants, to buy, promote and sell the items thus the employee is encourage to go for it. According to Longo (1989), this type of attitude is ingrained into the Wal-Mart culture from top to bottom. Resulting in incentive rewards such as merit pay, employee awards, profit sharing, company functions and 401K just to name a few. By...

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