This question is often one of the more controversial and hotly debated topics with companies striving to achieve and sustain excellence. There is certainly no right or wrong answer here, but I’m happy to share my personal experience with this dilemma. It’s a very company- and facility-specific set of circumstances that must be understood before embarking on monetary incentives for a large universe of new participants.
First, let’s agree that whether we call it pay for performance (P4P), gainsharing, group incentive or whatever, that the essential ingredient here is to design a compensation scheme that makes the hourly associates’ compensation variable subject to actual performance vs. a predetermined set of objectives.
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