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Payout Standards HR Assignment & Homework Help

Payout Standards 

Besides answering why, who, and where, nontraditional compensation plans also must answer what and when: What triggers the payout? When? With individual and even group incentives, the trigger is usually one or two clearly stated standards. For example, under piece rates, workers are paid for each unit produced. With gainsharing, the standard is usually a percentage of the cost savings or increased profits.

When should the payout occur? In agriculture, pickers are often paid daily. ln production or sales, the payout is added to the weekly or biweekly paycheck. Gainsharing may delay the payout until quarterly or even annual pay ments are given. The delay in gainsharing helps smooth out seasonal and even monthly variations caused by sales and production. Although longer delays separate the reward from the performance, the resulting bonuses may be larger and thus more significant.

Posted on September 4, 2014 in Incentives and Gain sharing

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