reply to the students response in 150 words and provide 1 reference


What are the two basic requirements of an effective incentive pay plan? Please remember to explain your reasoning.

students response\


According to Rue, Ibrahim and Byars (2016), the two basic requirements of an effective incentive plan are:  1) the plan concerns the procedures and methods used to appraise employee performance and 2) the incentives (rewards) must be based on performance (p. 288).

I think an employee’s performance, particularly if it is stellar, will be reciprocated by incentives.  This is not to say the employee seeks incentives from the onset because of their work.  Many employees simply love and enjoy what they do.  This is just part of the “reward” process for going above and beyond relative to organizational contributions.  I think it begins by employees enjoying what they do through job satisfaction and, in turn, incentives will follow.  Employees are assessed via performance appraisals which are used for a variety of reasons, but more importantly, used to help communicate how the employee is performing their job while establishing a plan of improvement (Rue, Ibrahim & Byars, 2016, p. 224).  A couple of key things a performance appraisal addresses are strengths and weaknesses of the employee which plays a significant role in determining whether employees have met the criteria for any job incentive.  Bottom line is incentives should be based on merits of the work performed by employees.  If an employee’s performance is well-above average, there is strong propensity that this individual will be in the running for job incentives.  In contrast, marginal performers do not usually receive high marks on their respective appraisal and subsequently run the risk of not being rewarded or even worse, fired over a course of time.

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