Compensation Packages And Incentive Schemes - 911 Words

This paper has five further sections. Section two looks into different types of compensation packages and incentive schemes. Section three investigates and analyses the arguments that are put forward in their support, section four investigates the arguments that reject them. Section five considers the motivational theories and their link to compensation packages and incentive schemes with effects of both on individual behaviour. And section six summarises current evidence on the effects of compensation packages and incentive schemes, and their effects on individual behaviour. Compensation Packages and Incentive Schemes (43/500) Reward systems, reward strategies, incentive plans and incentive structures are all terms to describe the systems or plans organisations utilise in order to influence the behaviour of its employees’ (Kerr, 1995; Rubenfeld and David, 2006). Arguments Supporting Compensation Packages and Incentive Schemes, and the Positive Effect on Behaviour (110/500) More aggressive pay-for-performance systems (and a higher probability of dismissal for poor performance) would produce much lower compensation for less talented managers. Over time, these managers would be replaced by more able and more highly motivated individuals who would, on average, perform better and earn higher levels of pay. Existing managers need to find greater incentives to creative ways to enhance corporate performance, and their pay would rise as well (Jenson Murphy, 1990). It wasShow MoreRelatedCompensation Management : Employee Management Essay1544 Words   |  7 Pages1. COMPENSATION MANAGEMENT In employment contract, the most important term is the remuneration package that goes with labour service. According to International Labour Organization (ILO), describes remuneration as payment system based on effort, productivity and performance. 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