abhishreshthaa
Abhijeet S
INCENTIVE SCHEMES
Incentives are the monetary benefits, which are paid to the workmen for their outstanding performance. The primary advantage of incentive is increment & motivation for higher efficiency & greater output. Workers are not motivated to work continuously for a fixed remuneration. Increased earnings in the form of incentives help the workers to produce more.
Introduction of incentive plans help in:
• Reduction in supervision
• Better utilization of the equipment
• Reduction in the idle time of men & machine
• Reduction in absenteeism amongst workers
• Increase in turnover
• Accurately estimating the labour cost
The management implements incentive packages because they don’t affect the employer contribution to the provident fu & other employee retirement benefits.
Company’s Incentive Policy:
The company’s’ will follow ‘Income varies in proportion to the output’ type of incentive scheme. Consider this example in order to understand the company’s incentive method:
• Say if the standard production per day is 100 pens
• The daily wage is Rs.80.
• A worker produces say 110 pens.
• This means he has produced 10% more than the standard.
• Therefore the incentive given to him would be 10% of his wage.
• Therefore 10% of 80 come to 8 and hence his total earnings of the day amount to Rs. 88.
Incentives are the monetary benefits, which are paid to the workmen for their outstanding performance. The primary advantage of incentive is increment & motivation for higher efficiency & greater output. Workers are not motivated to work continuously for a fixed remuneration. Increased earnings in the form of incentives help the workers to produce more.
Introduction of incentive plans help in:
• Reduction in supervision
• Better utilization of the equipment
• Reduction in the idle time of men & machine
• Reduction in absenteeism amongst workers
• Increase in turnover
• Accurately estimating the labour cost
The management implements incentive packages because they don’t affect the employer contribution to the provident fu & other employee retirement benefits.
Company’s Incentive Policy:
The company’s’ will follow ‘Income varies in proportion to the output’ type of incentive scheme. Consider this example in order to understand the company’s incentive method:
• Say if the standard production per day is 100 pens
• The daily wage is Rs.80.
• A worker produces say 110 pens.
• This means he has produced 10% more than the standard.
• Therefore the incentive given to him would be 10% of his wage.
• Therefore 10% of 80 come to 8 and hence his total earnings of the day amount to Rs. 88.
Last edited: