Skip to main content
  1. News
  2. Business & Finance
  3. Small Business

The importance of incentive plans for your organization

See also

Incentive plans provide employees with the chance to receive rewards and recognition for their good performance in the form of money. The use of incentive plans has been widely accepted by many organizations and has resulted in many positive outcomes as Rubenfeld (2006) explained. There are many different types of incentive plans that organizations have the chance to use. As Rubenfeld (2006) stated incentive plans are linked to increased organization performance, increased employee productivity and a higher organization commitment, and they also should reduce misunderstandings and conflicts by giving employees a clear message of organizational priorities. Overall the various plans that will be discussed have shown to be beneficial for both organizations and employees. It is still up to an employer to decide which incentive plan to use if any to reward its employees for their performance on an individual level or in a group dynamic.

Some incentive plans take the collaborative efforts of an entire team to get rewarded. Dessler (2011) discussed group incentive plans where companies pay a group instead of individuals to encourage teamwork. The advantages of this plan would be bringing staff members together to work towards a common goal, which helps with the morale of the company, cohesiveness, and it allows management to see how workers perform in a team environment. Dessler goes on to say that there are disadvantages to this type of plan since each worker’s rewards don’t necessarily reflect his or her own efforts. There could be workers within the group that decide they will set back and let others carry the load, which is extremely unfair to the individuals that are working hard to reach a particular goal. There are some companies that consider this flaw and decide to pay team members different amounts based on their individual efforts.

Dessler, G. (2011). A Framework for Human Resource Management (6th ed.). Upper Saddle River, NJ: Prentice Hall.
Rubenfeld, S., & Jannifer, D. (2006). Multiple employee incentive plans: Too much of a good thing? Compensation and Benefits Review, 35-40.



  • Al Qaeda video surfaces
    A video of an Al Qaeda meeting surfaces, concealed identities are raising suspicions
    Watch Video
  • Boston Marathon
    Boston cops shut down Boylston street after finding suspicious, unattended backpacks
    Top News
  • Death penalty for hate crime?
    Actions by the anti-Semitic gunman are being condemned by the unlikeliest of groups
    Crime News
  • New York gun control
    As many as one million New Yorkers are ready to disregard the state's new gun laws
  • Korean ferry capsizes
    Hundreds of passengers are missing after a ferry sinks off the South Korean coast
    World News
  • NYPD ends surveillance on Muslims
    The NYPD will end surveillance programs against Muslims in their own communities
    Watch Video

User login

Log in
Sign in with your email and password. Or reset your password.
Write for us
Interested in becoming an Examiner and sharing your experience and passion? We're always looking for quality writers. Find out more about and apply today!