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.
Incentive pay plans is a system that increases pay by productivity or performance. The two types of incentive plans are individual based performance plans and group based performance plans. Individual based plans rely on the employee and their own performance. Group based incentive plans are based off of the performance of the group as a whole. To have an effective incentive plan, employees must be involved. The incentive plans must be based on the employees performance, and they must be evaluated on a fair scale. The relationship of performance and incentives, must be shown. For a group based plan, the employees performance must have a direct relationship with the rewards that are given as a whole group. In my opinion, I believe employee based incentive plans would work better because people rely on their own performance and not on others. Employees will see a better relationship on their own performance instead of the performance of their peers.