Individual or Small-Group Incentive Plans
Individual and work-group plans traditionally have rewarded performance b~ U51f.; output (often defined by piece rates) and quality measures. Quality is accounted for b~ a quality adjustment factor. say percent of rework (e.g .. Incentive pay = Total output x [I -. Percent deduction for rework].’ In recent years skill development has also been raw called pay for knowledge, this means that a worker is compensated for learning new tasks. This is particularly important in job shops using group technology. and II: where supervisors’ jobs require knowledge of new types of financial insrrun.e.u-, and selling approaches.
AT&T, for example, instituted incentive programs for its managers-an Incentive Award (HA) and a Management Team Incentive Award (YiTIA). The ideas lump-sum bonuses to outstanding performers. These outstanding performer Determined by individual performance ratings accompanied by extensiveThe lump-sum bonus could range between 15 and 30 percent of base pay. ITIAs are granted to members of specific divisions or units. Appropriate te decision or unit goals are established at the beginning of the year. The goals include departure ice objectives and interdepartmental goals. A typical MTIA could call for a standard equivalent to 1.5 percent of wages plus overtime for the next three years based on the performance in the current year.