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An average level of productivity jumped from 86.4 percent to 123.5 percent; that
is, an increase of 42.9 percent. This indicates that although incentive schemes
are not the only means of improving performance, they obviously can have a
significant impact.
This criteria was based on relative importance and the potential impact that they
may have on the success of performing the job under evaluation.
Each criterion consists of 4 subcriteria . A 7-point scale for each sub-criterion is
used for evaluation, where 4 is the lowest grade and 10 is the highest.
Here we obtain a maximum grade of 40 points (4 subcriteria with a maximum of
10 points each), the value of the denominator is 40. Thus, GlEFF(k) will be
within the range
Group 1 of Performance Criteria of employess
(Note that the values circled represent the performance of a specific employee.)
Grade scale
Excellent 10
Very good 9
Good 8
Above averge 7
Average 6
Below average 5
bad 4
Not relevant 3
In order to find the employee's bonus, the EFF(i) for all the employees in that
department has to be calculated For example, if amt of money assigned for
bonus = $15,000 and there are 6 employees in the department with EFF(i) as
follows,
EFF(1) 115
EFF(2) 120
EFF(3) 80
EFF(4) 60
EFF(5) 95
EFF(6) 110
CONCLUSION
It is obvious that such a scheme increases the motivation of the employee to
use a greater part of his potential for the company's needs. Consequently, a
company may find that the benefits reaped by introducing a wage incentive
scheme far outweigh any increases incurred in salary costs.