FEATURES  OF  INCENTIVE  PLANS

The characteristics of these plans are as following:

1. Minimum wages are guaranteed to all employees.
2. Incentives by way of bonus, etc., are offered to efficient employee for the time saved.
3. A standard time is fixed and the employee is expected to carry out the given work within the standard time. The standard time is setting up after making time studies for the performance of a particular job.
4. Guaranteed minimum wages: It ought to guarantee minimum wages irrespective of the performance of the employee.
5. Simple: It ought to be simple to operate and easy to understand.
6. Equitable: All of the workers should get an equal chance to earn the incentive pay. Equivalent pay for equal work should be the rule.
7. Economical: The incentive plan should not be expensive affair. The benefits ought to exceed the costs.
8. Flexible: It ought to be reasonably flexible so as to take care of changes in demand for, technology and supply of skills, competitive rates in the industry, etc.
9. Support:  The incentive plan should take employee & unions into confidence. It might be implemented after consulting the employee and their union. In general speaking, it should be the result of mutual trust and understanding among management and employee.
10. Motivating: The incentive should be high enough to inspire the employee to superior performance. At the similar time, there should be checks & balances to ensure that the employee does not exert himself to painful levels, influencing the quality.
11. Prompt: There should be very small time gap between performance & payment. As soon as the job is completed, the worker should get his (incentive) earnings promptly.

Incentive plans incorporate all of the advantages of piece rate wages however they resemble time wages so far as the payments are concerned. Under Incentive Plans, the workers and the employee share the advantage of time saved. The many incentive plans have benefited workers and employers both, as they outcome in lower labour, higher wages, turnover and better industrial relations & morale. The following are the more significant incentive plans of wage payment.