How Effective Is Your Incentive Compensation System?

Recent surveys indicate that more than 75 percent of U.S. engineering firms provide some form of employee incentive compensation. But a study shows that salary only ranks fifth on the list of dissatisfiers or factors that can negatively affect job attitudes, behind company policies and supervisor-staff relationships, among other things. Achievement, recognition, and the work itself are the top motivating factors for employees. The article presents common problems with incentive compensation, elements of an effective incentive program and typical incentive compensation in the engineering industry.