Employee Incentive Plans in Industry

Excerpts from the report: Opinions on incentive payment plans for employees, their value, method of making payment, and form the incentive payment should take if made, are literally a dime a dozen. The successful use of incentive plans during recent years by an increasing number of companies has poured fresh oil on the continuing debate as to whether such plans are really worth the expense and trouble involved in installing and administering them. Cooperatives in increasing numbers are finding it necessary to think in terms of some form of employee incentive payment plans because of the definite trend in this direction. Before reaching a decision any organization exploring the field will do well to look beyond the payment of simple bonuses to other forms of incentive plans including the direct sharing of savings either through the establishment of a trust fund payable at retirement or the adoption of a retirement plan, the cost of which may be borne by both the employee and the association. In order to develop more definite suggestions and recommendations for cooperatives interested in incentive plans, the Farmer Cooperative Service has underway a study of various forms of incentive plans currently in use by cooperatives. In connection with this project the author has made a comprehensive review of existing literature on the use of incentive payment plans in various kinds of businesses outside the cooperative field. This review covered most of the types of plans in use today. An effort has been made to determine factors which have contributed to success and failure of the plans. Information covers such points as methods, results, attitudes, special requirements, conditions to success, and pitfalls. A brief summary of this information is presented here to help farmers' cooperatives who may be considering the adoption of some form of employee incentive payment plan.