An ideal incentive plan
must possess the following features:
a) Simplicity
- The plan should be simple to understand and operate. Who should be able to
calculate their wages without any difficulty?
b) Acceptability
- It should be acceptable to workers as well as the employer.
c) Flexibility
- The incentive plan should be flexible to introduce nice changes.
d) Quality
- The plan should ensure the quality of the output. Workers should be
discouraged to speed up the work to earn more wages at the cost of quality.
e) Stability
- The plan should give a stable earnings over a period of time, minimum but
adequate wage must be ensured.
f) Wide
coverage - It should cover the maximum number of workers. 1 direct as well as
indirect worker should be covered.
g) No
restriction on earnings - The plan should not have any restriction earnings of
workers. They should be allowed to earn as much as they can.
h) Investigation
and evaluation - The plan should be based on scientific investigation and
evaluation to produce good result. Standard time should fix on the basis of
time and motion study.
i)
Increasing output and lowering cost of
production - It should aim increasing output and lowering cost of production.
j)
Motivating to earn more - The plan should
motivate the workers increase their efficiency and earn more.
The success of an incentive plan
depends on the mutual cooperation a understanding between employer and
employees.
