Do Incentive Plans Really Work?

Does your company use incentive based or pay for performance compensation plans? If so, are you achieving desired results? If not, have you made a conscience decision not to implement a plan, or has it simply not been a high priority?

Arguments for and against pay for performance plans in manufacturing have been going on for years. Deming said that the inability to achieve targets is due to poor systems, not people's poor performance. So setting targets or quotas doesn't work. Some would argue that reward and punishment are simply two sides of the same coin. Others claim short and/or long term positive effects of linking pay to performance. There are also arguments that incentive plans work, but that they must be carefully and methodically implemented or they may drive the wrong behavior. Then there are philosophies around whether the incentive plans should be individual, team, or organizationally based.

Recent surveys indicate approximately 75% of US companies use some type of pay for performance program - does your company? Do they really work? Join us for our next Lake County Manufacturing Round Table meeting for a lively discussion on incentive plans on Thursday January 13, 2011 at 7:45 am Seekers Coffee House in Mentor.