Employee benefit.


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Employee benefit.

  1. 1. An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees, and in sales to attract and retain customers. Scientific literature also refers to this concept as pay for performance A successful incentive program requires clearly defined rules, suitable rewards, efficient communication strategies, and measurable success metrics. By adapting each element of the program to fit the target audience, companies are better able to engage program participants and enhance the overall program effectiveness. An incentive program represents a substantial investment to most organizations. Receiving a sufficient return on that investment requires the full participation of the program participants. Incentive programs are based upon the concept that effort increases as people perceive themselves progressing towards their goal. Therefore programs should offer participants a variety of products and services based on their unique interests and diverse needs. Successful programs need to carefully develop their reward methods to keep participants eager to approach a new goal once they have achieved a reward. Incentive Schemes Recognition of performance is a major trend in reward, and leading organisations have implemented variable pay to differentiate and recognise top performers in the organisation, in the form of incentives. A short-term incentive measures performance for up to 1 year, and typically includes profit share, gain share, commission and bonus schemes. A short-term incentive scheme has the following purposes: Attract Retain Motivate
  2. 2. Reward Drive company strategy Engender an entrepreneurial spirit Change the focus from process to outputs Align employee behavior with shareholder expectations A long-term incentive scheme measures performance for over 1 year, and typically includes share schemes, EVA, and rolling cash-based schemes. Strategic advantages of a long-term incentive scheme: Aligning executives’ interests with those of the shareholders Encouraging executives to maximise long-term shareholder value (if the design of equity vehicles is appropriate) inter alia by facilitating share ownership for executives Acting as an attraction and retention vehicle for top skills Necessity to provide market related remuneration, particularly at Executive level There are various ways that we can assist you with incentive schemes: We can review/audit your existing incentive schemes to ensure to ensure alignment with the business’ objectives, and best practice. We can assist you with the design and implementation of the various types of incentive schemes. We can benchmark your incentive schemes to the market. We can provide training on all aspects of incentive schemes to ensure the skills are retained in your organisation.
  3. 3.  How and why they work Incentive programs improve performance. Carefully selected and implemented incentive programs, using rewards - whether in the form of gift cards, travel/vacations, cash or time off increase performance by an average of 22%. Team incentives can increase productivity as much as 44%. Incentive programs engage participants. Employees are motivated by being rewarded. When a program is initially offered, employers see a spike in the level of interest and motivation among employees. As the program continues an even greater performance level and job satisfaction can be achieved. Incentive programs attract quality employees. Organizations that offer incentive programs with the right mix of benefits, training rewards and recognition have the ability to attract higher quality workers than other organizations. Long-term programs outperform short-term programs. Be in it for the long haul. Studies prove that programs that run longer than a year produced a higher percentage of performance and met the goals of the program. Executives and Employees value being rewarded. Both executives and employees report they value incentive programs. Employees come to work with a new attitude and executives see a healthier and happier work environment. Quota-based rewards programs work best. Programs that give everyone a chance to be rewarded based on meeting or exceeding goals typically generate the best results. Least effective are tournament based programs, closed-ended programs that only reward a certain number of winners
  4. 4. Scales of pay -: Executive – (Effective from 1.1.2007) Grade Scale of Pay E1 20600 - 46500 E2 24900 – 50500 E2A 24900 – 50500 E3 29100 - 55500 E4 32900 – 58000 E5 36600 – 72000 E6 43200 – 66000 E7 51300 - 73000 E7A 51300 – 73000 E8 51300 – 73000 E9 62000 – 80000 Non – Executive – (Effective from 1.1.2007) Grade Scale of Pay W0 8700 – 20000 W1 10500 – 23000 W2 11000 – 24500 W3 11500 – 26000 W4 12500 – 27500 W5 13500 – 29500 W6 14500 – 32500 W7 15500 – 34000 W8/S1 16000 – 35500 W9/S2 17000 – 36000 W10/S3 18500 – 40000 W11/S4 20000 – 42500 SG 20500 – 44500
  5. 5. COMPENSATION STRATEGY OF NTPC – NTPC is known as the highest payer in the power sector. The main objectives of such strategy are– 1. Recruitment and retention of qualified employees. 2. Increasing the moral of employees. 3. Rewarding and encouraging good performance. 4. Achieve internal and external equity. 5. Pre loyalty Modification (through negotiations) or influence the practices of unions. REWARDS AND BENEFITS - NTPC believes that everyone who works should feel. That is why the company offers a total compensation package that includes both cash compensation and benefits. Cash compensation to ensure that NTPC attracts, retains and motivate high-performing. The compensation structure is designed in such a way so as to recognize and reward critical skills and competencies in employees. Compensation structure includes Base pay, fixed bonuses, allowances or other payments relevant to the local market. Performance bonus and sales incentive may also be included in the cash compensation, and are used to ensure that the employees are paid competitively in the market. Performance bonus High performing employees are paid performance bonus through schemes like, generation performance scheme ‟to reward the employees for good performance. This helps in boosting the moral of employees and recognizes their effort.
  6. 6. Employee stock purchase plan Since 1988, NTPC has offered stock purchase plans because the company believes in the value of employee ownership. All regular employees, including workers who are regular part timers, are eligible to participate in the plan if they choose. Healthcare, well being and personal benefits NTPC offers arrange of personal benefits such as medical schemes, dental schemes, health screening, wellness programs, retirement and insurance programs. The dependents of the employee are also under the purview of this benefit. Flexibility and work life balance NTPC is committed to create a workplace culture and environment in which the employee can balance the career aspirations and personal priorities. The company offers a number of programs, Additional programs. NTPC offers employees various discounts for goods and services– NTPC Personal computer purchase, Housing assistance purchase plan, Car purchase plan, Child care services and mobile phone plans, Fitness centres and educational courses. COMPENSATION & BENEFIT PRACTICES, POLICIES, PROGRAMS AND POLICIES– EMPLOYEE BENEFITS – Healthcare (PPO, POS, HMO, HAS). Dental care plans Retirement plans Flexible benefit plans Disability benefit plans Group life & AD insurance plans Benefits for part-time employees Domestic partner benefits
  7. 7. EMPLOYEE POLICY & PROGRAMS – Paid time off (PTO) Alternative work schedule Recruitment and hiring Hiring bonuses Referral bonuses Retention bonuses Severance practices Work place environment Career planning & professional development Military leave policy. Other benefits to worker class  Wage Incentive scheme – A method of payment for work of an acceptable quality produced over and above specified quality or standard.  Individual Payment by result schemes – Several individual PBR systems are in vogue. Some of the well known plans are piece rate system, premium bonus system or work improvement system. Piece rate systems were the forerunners of modern incentives systems under this category. The unit of measurement can be number, weight or volume of the items produced reward is based on an agreed rate per unit of output. Another method of individual PBR considers time as the unit of analysis. Earning incentive depend on the difference between the time taken and time allowed to complete a certain job. Such schemes are called as premium bonus or bonus schemes.  Group Payment – by- Result Scheme – Group PBR is appropriate where the jobs are interdependent, where it is difficult to meaningfully measure individual performance and where group pressure can influence the output of the members of the group. As in
  8. 8. individual PBR schemes, there should be an objective measure of performance for the groups which the members should know that they can effect by their performance.  Plant or Enterprise Schemes – PBR schemes could be extended to plants or enterprises. The schemes emphasize gain sharing accruing through reduction in labor and other costs. Performance index based on a ratio of some output of some output costs like labor, material or other costs is calculated. the objectives and scope of plant or enterprise wide PBR can be much wider providing for employee participation and labor management cooperation.  Time rate systems – On situation where individual group or plant/enterprise based PBR systems are difficult to introduce, pay could be related to time put in on the job. Simple time rate system does not provide any linkage between pay and performance and therefore the latter may become a casualty. Variations like measured day work and merit rating seek to link performance with time rate payment.  Measure day work – Under this pay is determined in the employment contract. The employee is required to put in a minimum specified performance to be eligible to get the pay.  Merit rating – Scheme is a method of granting fixed pay increments or regular pay raises linked to performance appraisal. The size of the raise, timing and pace of the pay range are all an aspect on which there is a need to establish a policy. It may also be in the form of bonus.  Managerial Incentive Plans – Most of the incentive scheme discussed generally been applied to workmen and staff but these extended to the managerial employees also. Managerial employees are given the following types of incentives:
  9. 9.  Commission as a percentage of profit. Stock options whereby managerial employees are given shares at a special price usually lower than market value.  Bonuses in cash or kind (discount coupons, paid holiday travel, educational program).