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HR Zone » Performance Assessment » Incentive System.

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Incentive System.
Vinay
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Posted 22-10-2009Reply

Hi everyone,

Paying incentive are commonly used pay rate system which motivates an employee to increase his level of production and performance.

I am aware of some basis techniques such as piece rate system, profit sharing.

I want to know other type of incentive system which commonly used in industry and best method to implement and frame a incentive based pay system.

Please share your valuable knowledge.

With regards,

Vinay Nair

Rajesh
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  Rated +2 | Posted 23-10-2009

Hi Vinay,

Incentive schemes differ for various companies. As i'm in the Hr Consulting field, i would tell you what all the incentive schemes i know.

As per HR consulting field i.e. recruitment field - incentives are based on the number of candidates they place and the billing value they get for the number of candidates they place. Normally it's given on a percentage basis.

i.e. If you do a billing value of More than 50 K, you would be given a incentive of 3-5 % of that 50 K as incentive and the percentage gets increased with increase in the billing value. This is what most of the Hr consulting firms follow.

As per IT infrastructure companies, one incentive they follow is as per the billing done by an employee. For Eg; An employee in IT infrastructure company solves his client's queries and the billing is based on hours and according to the billing he does, the incentive is alloted to him. Hope this would help you a bit,

Regards,

Rajesh

Shipra
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  Rated +1 | Posted 23-10-2009

I will like to add few points in Rajesh's reply.

Incentive str is either monthly or quaterly
Incentive is based on target exactly not billing (share on billing is profit sharing)
some companies are considering their monthly target to give incentive starts from 75%achieve, may be after completion of target.

Monthly target roll forwards if not completed, while in 3 months you can cover you over all target in any month.

Sometimes incentive above a certain level is flat like profit sharing say after 105% of the target

Team leader' incentive is of the individual target as well as team target. some companies give on the billing while some gives %age of the incentive received by the team

Some companies have slab for incentive (which is not very comfortable criteria) like 75-85% achievement of target so on.

other criteria
over all performance
over all working in the office (attitude, over time, time management etc)
hiring + client development

Vinay
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  Rated 0 | Posted 23-10-2009

Thanks Rajesh & Shipra for your valuable reply..

Sanjay
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  Rated +1 | Posted 23-10-2009

Can somebody share their thoughts on incentive scheme for employees of real estate advisors?

Vinay
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  Rated +2 | Posted 26-10-2009

Can somebody share their thoughts on incentive scheme for employees of real estate advisors?


Hi Sanjay,

First of all welcome to HRLink..

For real estate advisors, I believe the technique mention by Rajesh will really motivate the employees

"If you do a billing value of More than 50 K, you would be given a incentive of 3-5 % of that 50 K as incentive and the percentage gets increased with increase in the billing value"

But Rajesh given an example which was followed in Consulting firm. In your case the Billing amount will much more higher in Urban areas and giving a cetrain % to the advisor will definetly motivate an employee and boost him to achieve more.

Other than than you can frame some slab and give incentive as a fixed amount rather than %.

eg. If the advisor make a closing of
50000-2000000 then Rs 3000 as incentive.
2L-5L then Rs 5000.
Above 5 L then some higher amount. (* amount of incentive which I mentioned is just an example)

One more point you can also customise things, if the area or land is in great demand and moving like hot cakes then some nominal incentive will do because effort taken by the advisor will be less and if the area is not at all in demand and he make some closing then his effort should be rewarded accordingly.

I hope you will get some more ideas even from the forum..

Thanks & Regards,
Vinay :-)


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