Effective Employee Incentive Plans: Features and Implementation Processes

Abstract

[Excerpt] This paper will evaluate the effectiveness of broad-based employee incentives, identifying the features of effective plans. For our purposes, “broad-based” is used to signal that more than 50 percent of employees are eligible for this variable pay plan. In addition, the terms “variable pay plan” and “pay for performance” are used interchangeably as they appeared in the original sources.