Individual Incentives scheme -Reward systems tied to the performance of individual employees are known as individual incentive plans. These plans depend on category of workers for which they are designed. Under this plan mostly a certain pay rate is guaranteed and the rewards represent additional compensation.
Performance of individual employees are accessed and evaluated to give out their incentives and other perks.
Advantage – The standard output is determined on the basis of time and motion studies by the specialists and the rates of wages are fixed for different jobs on the basis of job evaluation. This stimulates workers to work more.
Disadvantage -Even though output is increasing the quality is at the receiving end. Employees give more stress on increase in output neglecting the quality. Employees become quantity conscious and not quality conscious.
Group Incentive Program – Team compensation is typically used when teamwork is mission critical. In technical fields such as software development, there may be several interdependent teams creating a final deliverable. These teams are judged corporately as to speed and accuracy, assuming each member of the team is required to complete the task on time and at budget. The compensation of the group is typically scaled in percentages of the maximum pay scale depending on when or how well the team completes the task
Advantages – In team compensation, employees may perform better in hopes of not letting down the team. This is especially so in project-based jobs which require every team member to complete a task before the rest of the team can advance to the next stage of work. Information is shared more freely when teams are reviewed and compensated as a group because the incentive to withhold information for personal gain is reduced.
Disadvantages-Team compensation can lead to individual employees carrying too much burden and others being compensated for poor performance. Arguments among the team in these cases may diminish morale and harm the quality of the deliverable. Power struggles for credit when a task goes well or blame when it goes poorly can arise in a group compensation model.
Enterprise Incentive Scheme – Enterprise Incentive schemes are the incentives given by usually government to the small enterprise to promote the small scale producers in the market to maintain the competition in the market.