Incentive Plans Paper
Danyiel Brown
MGT/431
University of Phoenix
March 29, 2012
Demetrius Holt

Incentive Plans Paper
Incentive plans are reward plans that are used to motivate employees to perform past the common values of their company and increase their productivity created by their company. . There are three types of incentive plans recognized by the experts in the HR and development field; they are enterprise, group and individual. One of the incentive plans that most organizations provide these days is merit pay. Merit pay is determined by the employee’s work performance and achievements set forth by the organization’s standards. “Merit raises can serve to motivate if employees perceive the raise to be related to the performance required to earn it” (Al-Nsour, 2012). There can be a downsize to providing employees with merit raises because over years the employees performance may decline but they will still feel that they are obligated to receive the raised whether they performed or not. There are other issues that can occur with merit pay incentives such as no rules put in place for managers to calculate work performance, not enough funds obtainable to increase the base pay for the entire staff and some employees may assume merit pay has nothing to do with their work performance and overall productivity. Merit pay sometimes does not motivate employees of an upper level because of the lack of honesty on both the managers and supervisors and the employees which keep the performance evaluation of managers and their employees at odds. Some companies offer group incentive plans. Group incentive plans provide several advantages for employees, unlike an individual plan. Group incentive plans gives the employees to work together as a team that way you can reduce jealousy and everyone that’s a part of the team profits from the awards. Now