Incentive compensation plans represent the best, most consistent method to pay for performance, enabling an organization to deliver targeted results while rewarding employees who are responsible for those results. Incentive plans can be designed to focus on three levels of performance: individual, team and organization. Individual incentives are the most prevalent, and they have been used for many years. At the same time, increasing numbers of organizations are recognizing team and group incentives as an effective way to build cooperation and reward teamwork. Team and group incentive plans will incorporate the same design parameters as plans for individuals, but they have the added complexity of measuring performance for a group of individuals rather than just one person.
