Case Study 11-1

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1. Why is important to include operating employees (non-managers) in the development and use of incentive programs?

It is important to include operating employees (non-managers) in the development and use of incentive programs in order to disseminate the desired business goals. This is especially true for manufacturing companies where the operating employees play a major role in the organization reaching preset goals. Operating employees (non-managers) are able to contribute information or suggestions as to how to reach the desired results. They represent the pulse of the organization. Operating employees are aware of all situations that may prevent the organization from reaching that target goal. Extending the development and use of the incentive programs to encompass the non-managers will aid in making them think more like owners (Ivancevich, 2010). The goal of a joint committee of upper-level and lower-level employees is to insure that the operating employees (lower level) will “buy in” on the incentive programs (Ivancevich, 2010). Just rolling out an incentive program without the input of the operating managers does not make them feel as if they are an intricate part of the team.

2.What is the individual performance modifier that the Towers Perrin survey identified? Explain it in managerial terms.

The Towers Perrin survey identifies the “individual performance modifier” as the measurement of an employee against yearly preset personal objectives regardless of the company’s targets (Ivancevich, 2010). Towers Perrin saw this in 62 percent of the companies in which organization-wide incentive plans are in place (Ivancevich, 2010). In terms of management, the organization is trying to manipulate the performance of its employees (Ivancevich, 2010). Management links the payout of the incentive program directly to the performance of each employee and his or her pre-established personal goals, the team’s performance and the overall performance of...
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