INCENTIVES FOR OPERATIONS EMPLOYEES AND EXECUTIVES    

Usually incentive plans envisage a basic rate on time basis applicable to all employee and incentive rates payable to the more efficient amongst them as additional compensation for their meritorious performance in terms of costs, time and quality. The incentive rates might take the form of bonus or premium. Bonus means payment to employee of the total benefit accruing from savings in time, costs, development in quality, etc. Premium means the reimbursement accruing to the firm as the consequence of higher output or better quality will be equally shared or on some agreed basis among the management and the employee.