2 assignments , each of them need 300 words
1
1.Identify the characteristics and advantages of effective incentive programs.
2.Describe several common individual incentive programs and situations in which such programs might be effective or ineffective.
Managing Hospitality Human Resources Chapter 9: Incentiveand Benefits Administration
which such programs might be effective or ineffective.
3. Describe several common group incentive programs and situations in which such programs might be effective or ineffective.
4.Identify four general categories of employee benefits and several factors to consider when developing benefit plans.
General Compensation Policy
• Incentives or benefits often combined with wages or salaries to form a total compensation package
• Pay and performance have been linked• Pay and performance have been linked together
• Question is?? – not whether to offer incentives
– BUT how to structure such programs
Effective Incentive Programs
• Must be directed with clear specific goals
• Must be room for improvement
• Tied to increases in the desired performance
• Goals must be – Fair and measurable
– Attainable
• Rewards must be – Substantial enough to encourage effort
– Linked to output, not time invested
– Administered quickly to reinforce its reason
– Valuable to those earning it
Advantages of Incentive Programs
• Retain quality employees
• Increase productivity
• Reduce labor costs
• Increase employee focus on company goals• Increase employee focus on company goals
What else???
Individual Incentive Programs
Most useful when the work involved is independent
6 different types:
• Piecework incentive programs d l h d bli h d i i f– rewards employees who exceed established minimums of
productivity
• Standard hour incentive programs – number of units completed per hour
• Commission programs – provide a series of rewards for each goal attainment
Individual Incentive Programs
• Bonus plans – Based on combination of base and incentive pay
• Pay for knowledge (or skills) – Determines employee base wages and rewards on goals employee reaches beyond those required by the current job
• Merit pay – Links rewards to performance
– Can be one time payment or base pay % increase
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Group Incentive Programs
• Most useful when cooperation and coordination are the program’s goals
&
• When managers believe that teamwork is an• When managers believe that teamwork is an appropriate part of the organizational goal
– The most common types of group incentives are generally characterized as gainsharing programs
– Cost‐saving plans reduce the amount of cash required to operate a business
Group Incentive Plans
• Profit‐sharing plans – which contend that if employees can improve profits by reducing costs or streamlining productivity, they should share in that profit.
Th th t f fit h i l– The three common types of profit sharing plans
• cash plans
• deferred plans
• combination plans
Group Incentive Plans
• Employee stock ownership plans (ESOPs) – used in many hospitality companies including Marriott
– establishes an account for each employee in a company
– the company distributes either cash or stock into employee accounts based on employee contributions to the company or its profits
• Two common ESOPs are ordinary ESOPs and leveraged ESOPs
Money vs. Merchandise
• Merchandise – Has a longer lasting effect than money
– Constantly reminds employees of the incentive for the reward
C b f id f l– Can be a source of pride for an employee
• Money – Allows an employee to purchase whatever goods or services are needed or desired
– May be particularly attractive to employees who have difficulty making ends meet on a regular basis
Disadvantages of Group Incentive Plans
• Even when employee performance exceeds expectations, employees suffer when the company has a bad year
• Free riders
• Group incentive plans result in an indistinct connection between pay and the individual efforts of each group member
• Group incentives can cause resentment
Employee Benefits
• 70% of employee compensation in the U.S. is paid in salaries and wages
• 30% of employee compensation is paid in benefitsbenefits
• Benefits offered by most companies include – Mandatory benefits
– Optional or voluntary benefits
– Pension and retirement benefits
– Miscellaneous benefits
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Mandatory Benefits
• Social Security – provides retirement income, disability income, Medicare, and survivor benefits
• Unemployment compensation
• Workers’ compensation provides – compensation for employees who become disabled or who die at work, regardless of who is at fault
Voluntary Benefits
• Group life insurance coverage – usually based on annual earnings of the employee
– most plans provide employees the opportunity to purchase additional coverage
G h l h i• Group health insurance – most costly benefit
• Health maintenance organizations
• Preferred provider organizations
• Self‐insurance
Pension and Retirement Benefits
• Contributory retirement plans – which both the employer and employee contribute to retirement accounts
– most popular 50 cents contributed by company f d ll t ib t d b lfor every dollar contributed by employee
• Non‐contributory retirement plans – only the employer contributes to employee retirement programs.
Pension and Retirement Benefits • Defined contribution plans
– “money purchase” or “profit‐sharing” plans – require an account to be created for each employee, where fixed‐rate contributions are made
• Under defined benefit plans – retirement benefits depend on length of service and average earnings of employees during employment
• The Employee Retirement Income Security Act of 1974 (ERISA) established
– reporting requirements, fiduciary responsibilities and guidelines for participation, vesting, and funding for retirement and pension plans
Pension and Retirement Benefits
• Individual Retirement Accounts (IRAs) – many of these tax‐deductible accounts became available to employees who already had retirement accounts with their employers
• Salary reduction plans – also known as 401(k) plans and capital accumulation plans
– allow employees to make tax‐deferred contributions to retirement accounts in company profit‐sharing plans
Other Benefits
• Education benefits
• Employee assistance programs (EAPs)
• Child care programs
• Pay for time not worked
• Paid leave bank
• Flexible workChild care programs
• Flexible benefits plans
• Long‐term care policies
Flexible work schedule
• Maximum work hours