Merits of Incentives The following are the advantages derived by providing incentives to employees: Higher output: By providing incentives to his employees, the employer is able to induce them to work better. This leads to higher output. Greater profits: Needless to say, higher output results in greater profits for the business. This happens in two ways. First, the cost per unit becomes less and second, the enterprise is able to keep the selling price low and this results in greater sales. No problem of idle time: In an organisation where no proper incentives are available for the workers, the tendency will be to while away the time. When suitable incentives are available, the workers become time conscious. They begin to Continue reading
Compensation Management
Prerequisites for a Good Incentive Scheme
‘Incentive’ may be defined as any reward of benefit given to the employee over and above his wage or salary with a view to motivating him to excel in his work. Incentives include both monetary as well as non-monetary rewards. A scheme of incentive is a plan to motivate individual or group performance. It is true that monetary compensation does constitute very important reason for the working of an employee. But this compensation alone cannot bring job satisfaction to the workers. One cannot expect effective performance from a worker who is dissatisfied with its job, even if he is well paid. Sociologists and industrial psychologists also view that the financial aspect is not the only dominant motivating force. Confidence in Continue reading
Guidelines for Effective Performance Appraisals
The performance appraisal requires willingness and a commitment to focus on improving performance at the level of the individual or team every day. Like a compass, an ongoing performance appraisal system provides instantaneous, real-time information that describes the difference between one’s current and desired course. To practice sound performance appraisal system, managers must do the same thing-provide timely feedback about performance, while constantly focusing everyone’s attention on the ultimate objective of being the best among the competitors in the market. Well-written performance appraisals are among the most effective tools for developing people. The following guidelines would be used for effective performance appraisals to significantly increase your team’s effectiveness and perceived value within your organization. Increase employees comfort level with performance Continue reading
Process of Performance Appraisal
One of the most important things to remember about performance appraisals is that its effectiveness will be highly influenced by its purpose. For example, a programme, which is developed, to focus on employee development and training needs may not be suitable for making major decisions about salaries. Likewise, it is possible that the organization, management and employee may all have different goals for the performance appraisal process. Performance appraisal involves ‘identifying, evaluating and developing employees’ work performance with the dual purpose of achieving the organization’s goals and objectives whilst also ensuring the employee receives recognition, feedback and development’. The process of performance appraisal starts with employee planning and ends with an evaluation of employee progress. The process of performance appraisal Continue reading
Developmental Approach to Performance Appraisal
The developmental approach to performance appraisal has been related to employees as individuals. This approach has been concerned with the use of performance appraisal as a contributor to employee motivation, development, and human resources planning. The developmental approach contained all of the traditional overall organizational performance appraisal purposes and the following additional purposes: Provided employees the opportunity to formally indicate the direction and level of the employee’s ambition. Show organizational interest in employee development, which was cited to help the enterprise retain ambitious, capable employees instead of losing the employees to competitors. Provided a structure for communications between employees and management to help clarify expectations of the employee by management and the employee, and Provide satisfaction and encouragement to the Continue reading
Introduction to Performance Appraisal
In almost every organization, every employee is subjected to periodic appraisal of his/her performance. This is highly important if the organization’s human resource development objectives are to be realized, if the organization wants to make best use of its human resource available and if the organization wants to have a scientific and retinal compensation system. An effective performance appraisal system brings rationality in management. If an organization wants to maximize its effectiveness then the organization must have tool by which it can discriminate between an effective employee and not so effective employee. Today, appraisal is not something of a choice left to the wishes of the corporate bosses, nor it is a privilege to be enjoyed by few businesses conglomerates. Continue reading