What is incentive wages planWage system that rewards a worker forproductivity above an establishedstandard.Incentive pay is based on a bonus given tothe workers who exceed a given standardproduction rate within a defined period oftime for increasing the efficiency ofemployees and workers
Things Included In IncentiveWage Plansfree house facilityfree education of children of workersfree medical treatmentBonuscommissionand other excess money gifts.
OBJECTIVES OF WAGESINCENTIVE PLANGood employee-employer relationship. Helps in increasing productivity. Boosts morale of employee. Motivates employee to perform better.improves quality of life. Improves the image of the organization.
Features of incentive plans:1) Minimum wages are guaranteed to allworkers2) Incentives by way of bonus, etc are offeredto efficient workers for the time saved.3) A standard time is fixed and the worker isexpected to perform the given work within thestandard time.
Types Of IncentivesStraight piecework planThe 100 percent bonus planGroup bonus plan
Advantages of incentiveplan(i) Increase in volume of output .(ii) Reduction of cost of production per unit(iii) Reduction of labor turnover.(iv) Reduction of idle time(v) Benefit to consumers
Disadvantages of IncentivePlans :i. Difficulty to fix standard time.ii. More supervision required.iii. Union opposition.iv. Rough work.v. Effect health.
Motives of incentive wageplanTo earn higher wageTo reduce unit costTo give rewardsControl over laborGreater output
IntroductionSummit Bank Ltd is one of the fastestgrowing commercial banks of Pakistan,which, in a very short span of time, hasexpanded its network across the countryOn 18thAugust 2010, Arif Habib Bank Ltdwas rebranded as Summit Bank Ltd.
1. Medical incentiveIn summit bank the medical incentive isgiven to all the employees of the bank and totheir family members.The complete medical facility is given to theemployees and their family members for thewhole year.
2. CommissionThe commission is given to all the low levelemployees like guards, sweepers of the bank.The criteria for the commission is thatemployees should have their 60% of salary incurrent account and remaining 40% in savingaccount per month in the summit bank.
3. GiftsThe gifts are mostly given to the Marketingemployees of the bank on their achievement ofthe tasks or goals assigned to them with in thegiven period of time and to maintain that giventasks. The gifts are LCDS. BIKES, CARSETC.The gifts are given throughout the year Aftercompleting of tasks.
4. Entertainment allowanceThe other incentive given by the summitbank is the Entertainment allowance. Thisallowance consists of TEA and otherrefreshments.The Entertainment allowance is given ondaily basis from the guards to the manager ofthe bank.
5. Gratuity fundThe gratuity fund is created for all theemployees. The fix percentage from salary isdeducted and added in the fund. The bank alsocontributed the same amount of percentage inthat fund.The amount from gratuity fund is given to theemployees after their retirement from the bank.
6. Refreshment packagesThe refreshment packages are given to theemployees of the bank at 4 times in a year.The refreshment packages are givenquarterly at every year. The employee cantake it whenever they want in one quarter.The fix amount is given to the employeesaccording to their posts.
Strengths:good incentives plan for low levelemployees.Clear incentives plans for all theemployees.
Weakness:No big incentives for high levelemployees.No proper implementation onincentives plan.
OpportunityThey have the opportunity to start thepension scheme for the employees.They can also give the houseincentives to the employees.
ThreatsThe incentives plans of competitor banksare the main threats which are attractingthe employees of the bank.The pension scheme of National Bank ofPakistan is also the threat for the summitbank.
ConclusionWage system that rewards a worker forproductivity above an established standard.Incentives by way of bonus, etc are offeredto efficient workers for the time saved.The incentives given by summit bank areBonus,comission,refreshment package andgifts to their employees.
SuggestionsThey should start the pension scheme forthe employees.Plan more incentives to high levelemployees.They should also give the house incentivesto the employees.