Team and Organization-Wide Incentive Plans

A. Profit Sharing Plans:

 Most employees receive a share of firms annual profits

B. Scanlon Plan
 Sharing of benefits formula
 Assume that normal monthly payroll to sales ratio is 50%
 In next month Sales = 10000
 Payroll = 4000
 Total savings = 1000
 So a percentage of savings is split amongst the workers, and remaining amount goes to the firm

C. Risk Pay Plans

 Some portion of employees normal pay is at risk if they don’t meet their goals
 Much larger bonus if they exceed their goals

D. Employee Stock Ownership Plan