The ultimate goal of every business is to achieve success and once achieved, maintain that position in the marketplace, but a smart business owner will have other equally important goals. Two of those are employee and customer satisfaction, which often go hand-in-hand. In an attempt to attract and keep the best employees companies use incentives as a means of motivating and rewarding employees. Incentive plans are an effective means of garnering hard work and commitment from employees, while simultaneously highlighting those employees who have the qualities of becoming stars of the organization. Although recognition may or may not come with a monetary reward positive feedback from company superiors is an excellent motivator, inspiring employees to work harder and often garnering employee loyalty.
Companies using incentive plans ensure the organization’s success, as well as retain established customers and gain new ones. The Citizens Property Insurance Corporation (CPIC) incentive plans vs. organizational objectives relate well to one another. Although near the bottom rung of the company ladder agents, those charged with selling products directly to customers, are the foundation of the business. Agents must be motivated to make sales, knowing each sale will directly profit the agent as well as the company. Rozycki states “The agent receives monetary compensation as well as nonmonetary compensations; the company has acquired a new customer or renewed an existing customer therefore gaining profitability, promotion and exposure” (2010). Katz agrees, stating, “The manager represents the organization to the world, deals with the world, and decides the direction the organization or the unit needs to take. Internally, the manager directs organizational activity and allocates resources to accomplish goals” ( 1974). All this is central to the organization's success.
Deciding whether to use variable pay plans is the responsibility of management. Individualized compensation plans are created according to management and organizational goals and several things must be taken into consideration when making those decisions. One thing to consider is whether the company wants compensation to be contingent on performance. In most companies, those who hold sales positions know higher performance reaches higher compensation. Second, does it make any difference in performance when pay and performance are connected? Again, in most companies an employees’ performance level is directly reflected in the amount of compensation.
In choosing a compensation plan it is important that an organization stay true to creating and sustaining open communication and a good relationship between management and employees. Miner states “Managers are probably the most important group of employees in the organization. While they represent a small percentage of the workers, they represent a major portion of the cost of compensation.” (1975). It is important to develop a compensation program for this group that both obtains the most from these employees and keeps the expenditures within reason. The managerial job is one of high pressure, a great deal of diversity, and the need to employ substantial judgment. Miner goes on to say, “Managers are highly devoted to the organization, have an action orientation, and a need to express their power motive” (1975). If incentive programs are not planned out and assessed regularly, they tend to be perceived as an outflow rather than an investment.
Citizens Property Insurance Corporation employee incentive plan does help the organization to achieve its goals and objectives by ensuring they have capable, educated, friendly, outgoing staff. CPIC understands the significant role benefits play in the lives of the employee and their family and desires to fortify recruiting, education and development programs for staff to retain the most highly qualified employees in the industry. It recognizes what is necessary to inspire employees on all levels; through company level recognition, departmental recognition, instant recognition, and service awards. In addition, the benefits package offered to employees of CPIC lists a wellness program, employee assistance program, and professional development. All full-time and part-time employees receive paid vacation after three months of employment. Vacation time varies from 104 to 144 hours a year, depending on the level of the position. Additionally offered are employee sick time, retirement-employment savings plan - 401(a)/457(b), medical (ppo or hmo), dental, life, ad & d, long-term disability, short-term disability, flexible spending accounts, and health care reimbursement.
The creation and use of any incentive program can be a powerful motivator; one that is easily understood by both management and employee, allowing both to grow and transform from average into excellence.

References

Katz, R. L. (1974, September-October). "The Skills of the Effective Administrator,". Harvard Business Review , pp. 90-102.
Miner, J. B. (1975). The Challenge of Managing. Philadelphia: Saunders.
Rozycki, L. A. (2010, Dec 4). "Incentive Plans: A Motivational Tool That Works.". CPA Practice Management Forum 4.10 (2008) , pp. 12-15.