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Performance Based Incentives

The document discusses performance-based incentive programs and their effectiveness in motivating employees. It finds that incentive programs can boost performance by 25-44% but only if they address all issues related to performance and human motivation. An eight-step PIBI model is introduced to help companies develop effective incentive programs that assess needs, select appropriate programs, establish goals and training, provide support, use emotional appeals, enable measurement and feedback. Examples of incentive programs at Tata Consultancy Services and for central government employees in India are provided.

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Saritha Putta
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287 views

Performance Based Incentives

The document discusses performance-based incentive programs and their effectiveness in motivating employees. It finds that incentive programs can boost performance by 25-44% but only if they address all issues related to performance and human motivation. An eight-step PIBI model is introduced to help companies develop effective incentive programs that assess needs, select appropriate programs, establish goals and training, provide support, use emotional appeals, enable measurement and feedback. Examples of incentive programs at Tata Consultancy Services and for central government employees in India are provided.

Uploaded by

Saritha Putta
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Who doesnt want to attract, hire and retain the best talents of the industry? Why not explore the new ways to foster employee motivation and drive them to achieve their targets then? After all an organizations performance is directly related to the performance of its human resources.

PERFORMANCE
The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract.

INCENTIVES
A thing that motivates or encourages one to do something.
Incentive pay, also known as "pay for performance" is generally given for specific performance results rather than simply for time worked.

TYPES OF INCENTIVES
1.Material incentives: tangible rewards often monetary -- wages, fringe benefits, patronage.
2.Solidary incentives: intangible rewards from the act of association -- sociability, status, identification 3.Purposive incentives: intangible rewards related to the goals of the organization --- e.g., working on an election of a supported candidate

Despite the fact that U.S. organizations spend over $100 billion annually on incentive programs, many business people question their effectiveness. Now, a ground-breaking study proves that incentive programs can boost performance by anywhere from

25 to 44 %, but only if conducted in ways that


address all issues related to performance and human motivation. The study found that most organizations lack the knowledge or will to create properly constructed programs that yield desired results.

The study was designed to help answer these four questions:


Do incentives increase work performance (and under what circumstances)?

Which incentive programs are most effective?


What types of organizations need incentives?

And what model best expresses how to select and implement successful programs?

Five conditions under which incentive programs work best: Current performance is inadequate. The cause of the inadequate performance is related to deficiencies in motivation. The desired performance type and level can be quantified. The goal is challenging but achievable. The focus on promoting a particular behavior does not conflict with or override everyday organizational goals.

To help companies develop effective incentive programs, the researchers identified an eight-event PIBI (Performance Improvement By Incentives) Model. It specifies the human issues relevant to performance, provides guidance on the stepby-step procedures of implementation, and allows decisionmakers to troubleshoot and correct the system if it fails to yield desired results.

PIBI S EIGHT PARAMETERS


ASSESSMENT
PROGRAM SELECTION WORK VALUE ESTABLISH TRAINING AND COMMUNICATION SUPPORT EMOTIONAL APPEAL MEASUREMENT ANALYSIS AND FEEDBACK

PERFORMANCE BASED INCENTIVE IN PRIVATE FIRM

TATA CONSULTANCY SERVICES


Tata consultancy services is a global IT services,

business solution, outsourcing company. Second largest India based BPO services Ranked #20 in the list of top companies in, Fortune 500 magazine. 142 offices across over 32 countries and generates about 30% of Indias IT export.

Incentive Plan at TCS


Tangible Benefits: Annual Bonus Plan Short-term Incentive Plan Long-term Incentive Plan Equity Incentive Plan In tangible: Project milestone parties Recognition of star performer On the Spot recognition

PERFORMANCE BASED INCENTIVE IN GOVERNMENT

Performance Related Incentive Scheme (PRIS) for Central Government Employees


It's welcome that the government is finally doing something to bring its work structures more in line with the modern principle of incentive-based performance. Called the Performance Related Incentive Scheme (PRIS),

PRIS as per Sixth Pay Commission recommendations


"Government of India has accepted in principle the recommendation of the Sixth Pay Commission for introduction of a Performance Related Incentive Scheme (PRIS) in the form of pecuniary benefit over and above regular salary, based on the targeted performance and performance parameters, out of the Non-Plan budgetary savings, for the Central Government employees," Minister of State for Personnel V Narayanasamy told Lok Sabha in a written reply.

Performance Related Incentive Scheme


The incentive will be based on the departments scorecard in meeting yearly targets committed by their respective secretaries and ministers as part of the results-framework documents (RFD) system. The committee of secretaries looking into performancebased incentive for government employees is said to have already zeroed in on a formula that offers a secretary-level officer an incentive up to 40% of the basic salary, provided his department has met 100% RFD targets. A scorecard of 70% and less in meeting RFD targets would however attract zero incentive. However, no penalty will be imposed on the non-performing officers.

A simple logic; if you make their day, they make your organization.

THANK YOU

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