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Non-traditional Incentive Systems

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1. Given the background information about Howe 2 Ski Stores, discuss the feasibility of implementing lump sum bonuses, pay for knowledge, profit sharing, and gain sharing plans in this situation. What plan or plans would you recommend the Howe look at more closely and why?
2. Assuming Howe decides that a gain sharing plan is feasible, what could be done to increase the likelihood of success?
3. What negative effects are likely to result from even the successful implementations of a gain sharing plan?

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The response provides you a structured explanation of Non-traditional Incentive Systems. It also gives you the relevant references.

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1. Howe 2 Ski Stores cannot implement lump sum bonuses because these are not directly linked to individual performance. Howe also cannot use pay for knowledge because whatever skills the employees acquire, unless the employees' on job performance improves, the performance of Howe will not improve. Profit sharing plan is not feasible because the incentive depends on the net profits of the entire company. The profits and losses of the company depend on several factors and on the ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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