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incentive based systems and skill based systems

Compare and contrast benefits of each:

1.) incentive based systems
2.) skill based systems

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Incentive based pay system is a compensation approach in which employees are paid incentive or bonuses in addition to base pay or fixed salary in lieu of achievement of individual or group targets. Incentive based pay systems provide numerous benefits such as high motivation and morale among employees as they are allowed to participate in the growth and profitability of the organization, healthy competition among employees to earn bonuses and incentives and strong team building in the case of team or group incentives, etc. Further, the incentive is tied to the performance of the employees and achievement of certain targets or benchmarks and thus, this type of pay system does not put unnecessary burden on the organization. However, there are disadvantages of this pay system as well. For example, incentives can often ...

Solution Summary

Compare and contrast incentive based systems and skill based systems