What are the types of group incentive plans?

 

Group Incentive plans: These incentive plans are given to group of workers. In individual incentive plans bonus or high wage rate is given to workers according to their individual performance. While in group incentive plans bonus or high wage rate is given to group of workers according to their group performance. These incentive plans are used when each worker has processed equal skill and determining wage rate is difficult. Some of the group incentive plans are as follows:

Sharing profit: Company shares part of profit among workers. It is act as an incentive plan for workers to motivate them to work efficiently. A sharing in profit among group of workers help them to motivate to work more efficiently to increase the profit of a company to get more shares in profit.

Co-operative partners: Company provides shares at reduced rate to group of workers if they meet the standard work in standard time to motivate them to work efficiently in future. Instead to give them share in profit company provide them rights to participate in management. It motivates them to work efficiently to participate in management to feel not just a workers but also part of management activities.

Other incentives: Company provide non-monetary benefits to its employees such as free house facility, free mobile expenses, free food etc. benefits are given to attract the workers to join the company and also help to motivate the workers to work efficiently. It also help to keep the workers in a company or in other words it help to reduce the attrition rate (people leaving company voluntarily).

Priest Man’s Plan: Under this plan standard of work is predetermined and workers who work efficiently and meet the standard work in standard time those get incentive, but not individual performance is measured in this plan. The group of performance is measured and if the group of workers achieved standard work in standard time then the whole group get incentive according to the production level increase. And if the group of workers are not able to meet the standard work in standard time then they will get minimum wages only. Under this plan group efforts get reward instead of individual effort. It helps to motivate team spirit among workers to work efficiently and it also reduces the chances of rising disputes among workers. In this plan the inefficient workers also get same incentive as efficient workers get.

Scanlon Plan: Under this plan workers get share in profit equally if the productivity increases. In this plan cost is reduced and productivity increases and also the profit level. The workers are allowed to offer ideas and suggestions regarding how to improve production level and if a committee likes the idea and implemented it. It will help to reduce the production cost and it will also increase the productivity of workers because the profit earned is shared among group of workers equally. Committee is formed by management which decide the ideas or suggestion given by workers are helpful to improve the production level or not if implemented in action.