HRM3705 STUDY UNIT 5

COMPENSATION MANAGEMENT
HRM3705


Study unit 5
Incentive pay




Prepared by Magda Bezuidenhout,

, Learning outcomes of study unit 5

Once you have completed study unit 5, you should be able to:

• Discuss how incentive pay and traditional pay systems differ
• Differentiate between the different types of incentive plans and evaluate
th i importance
their i t
• Discuss the incentive plans that reward individual behaviour
• Discuss the most broadlyy used companyy incentive payy plans
• Contrast between different individual and company incentive pay plans
• Design an incentive pay plan taking the company’s goals, competitive
strategy and culture into account




Prepared by Magda Bezuidenhout,

, Incentive Pay

• Compensation fluctuates according to:
• A pre-established
t bli h d fformula
l
• Individual or group goals
• Company earnings
• Adds to base pay
• Controls costs
• Motivates employees




Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall