According to Business Dictionary (a)   are compensation received from employment that is in addition to the regular, ordinary salary or wages. They include commissions, overtime earnings, awards, bonuses, retirement matching programs, or payment for unused vacation days.

Purposes of wage supplements

Types of supplemental wages

- An agreement (formal or informal) freely entered into by which employees receive a share fixed in advance of the profits.

- It is a payment in the form of cash, stock options, or otherwise, given under a predetermined and continuing policy sought by management of a company to all or any group of its officers or employees in addition to their wages.

- excludes gifts, gratuities, or other payments made by an employer to his employees out of profits at his discretion without being bound by a scheme.

- schemes is usually through the initiative of the individual firms, and in consequence schemes vary widely to suit the conditions of each company and the purposes and attitude of employers who introduce them.

- is usually free to terminate at any time, but until the employer does so they are bound to observe its provisions.

(a)  

Christmas Bonuses- it is usually paid during prosperous times, or when excess profits taxes are unusually high, the payment of Christmas Bonuses is much more widespread than at other times.

° When bonuses are paid regularly each year, regardless of the economic or tax situation. The costs are considered as part of the regular operating expenses of the business;

° When their distribution is contingent upon the company’s current financial situation, these bonuses assume the aspect of profit sharing.

° The eligibility requirements vary from industry, frequently payment of bonuses requires one year of service with the company and sometimes there are additional attendance and good behavior requirements.

° The most common type of bonus is based upon a certain percentage of annual wages. (e.g. 2 percent)

° Some companies pay a uniform amount to all regular employees, irrespective of individual earnings or length of service beyond the required minimum for obtaining a “regular status”.

° Some companies base each individual’s bonus upon a fixed sum per year of service.

(a)  

This system enjoys the advantage of providing employees with more pay for exerting greater effort while, at the same time, providing them the security of their regular wages.

° A bonus payment may be used upon the number of units that an individual or a group produces.

(a)  

refers to the compensation paid to an employee after completing a task, which is, often, selling a certain number of products or services.

° vary in the way they set and pay to their employees, this includes: straight commission, salary plus commission, and graduated commission.

(a)  

DE MINIMIS BENEFITS NOT SUBJECT TO

(a)  

The profit sharing was first devised by a Frenchman named (CAPSLOCK)

(a)  

objectives of profit sharing

objectives of special bonuses

This scheme attracted considerable attention not only in France but also in England so much so that about the middle of the 19thcentury, their principles were advocated principally by the, who influenced co-operative societies to apply them to their employees.

(a)  

Monetized unused vacation leave credits to employees not exceeding (a)   days during the year;

Medical cash allowance to dependents of employees, not exceeding P (a)   per employee per semester of ₱ 250.00 per month;

Uniform and clothing allowance not exceeding ₱ (a)   per annum;

Laundry allowance not exceeding ₱ (a)   per month;

Gifts given during Christmas and major anniversary celebrations not exceeding ₱ (a)   per employee per annum

Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed (a)   pesos per employee per taxable year;

Rice subsidy of ₱ 2,000.00 or one sack of 50kg rice per month amounting to not more than ₱ (a)  

is something, like a prize or desired action, that gets an employee to do more of whatever is/was encouraged by the employer. • An example of this is a company throwing a pancake party on Mondays to help employees get through the day while promoting something like teamwork through out the departments of the company. While enjoying a free pancake breakfast, employers are able to conduct meetings and brief employees on the company as a whole.

(a)  

a plan or program to motivate individual or group performance.

(a)  

most frequently built on monetary rewards(incentive pay or monetary bonus), but may also include a variety ofnon-monetary rewards or prizes.

(a)  

INCENTIVES CAN:

types of incentives

(3) Monetary or Financial Incentives

(4) Non-monetary or Non-financial incentives

the determinant factor of all incentives. In order to increase the efficiency of the laborer, various financial incentives such as: good wage, bonus, allowances, and money related income items ( free medical assistance, free education, etc.)are very essential.

(a)  

(a)   incentives impart self-confidence and give sense of security to the workers. They take more interest in work and produce more in the hope of getting still more monetary benefits. • Financial incentives also include such economic incentives as are given collectively to the employees.

- made to the employees under wages/pay packet. It is paid by the employers to the employees in order to provide relief to the latter against ever rising prices of consumer goods.

This incentive is given to compensation for rising prices or consumer price index.

It is an important part of the wages paid to the employees. Today, allowance is given to all government and most of the private sector employees.

Initially _______ was kept separate from the basic salary.

Presently, ____used to be treated as an additional income of the workers. And payment of ___ has become an integral part of wage payment.

(a)  

Is an arrangement entered into by which the employees review a share, fixed in advance of profits.

It is a scheme, whereby a certain percentage of the profits is distributed at fixed intervals, usually annually or semi-annually, in some definite ratio to all employees who have been in employment of the firm for a stated term.

According to International Labor Organization(ILO), (a)   is a method of industrial renumeration under which an employer undertakes to pay his employees a share in the net profits of the enterprise, in addition to their regular wages.

methods of profit sharing

merits of profit sharing

-to motivate the workers, payment of ___ is also quite significant. It serves as monetary incentive and helps establish cordial relations between employee and employer.

Payment of ___ to workers is prevalent in almost all industries.

 refers to that monetary payment which is paid to workers in addition to their wages as a reward for their good services.

(a)  

____incentives include all those non-financial, social and psychological factors for which employees get incentives for maximum and outstanding work.

• ___ incentives play an important role in getting work with greater efficiency from the worker.

• For the workers monetary reward has a great significance but of still greater importance is their interest in satisfying social and psychological needs.

• Studies viewed that ____ incentives are as important as monetary incentives.

(a)  

Every employee wants his job to be stable and secure. Security of service inspires him to perform his duty efficiently.

(a)  

Every employee looks for an opportunity to make progress. It is therefore essential that everybody should be ample opportunities for advancement. It is possible that he may not be able to take advantage of the opportunity when it comes his way but he does hope for the opportunity. Everyone prefers on higher post to financial gain.

(a)  

TYPES OF INCENTIVES: NON-FINANCIAL

TYPES OF INCENTIVES PLAN

THREE (3) TYPES OF GAIN SHARING PLAN

The most important objectives of a compensation package

(a)  

one of the most serious problems facing in the country and studies showed the frightening fact that this disease is prevalent in the vital organs of companies- management.

(a)  

the employees tasked with helping your companyto accomplish its strategic goals and objectives.

(a)  

Management’s low productivity is often caused by

(a)  

the primary motivation tool. Regardless ofhow the term is used, whether incentive plan or incentivebonus. It is still basic reward that counts.

(a)  

a company before venturing into such a plan must direct its attention towards estimating the additional earnings that would be realized which then must subsequently be compared with the costs of rewards, administration of the plan, etc. Moreover, Intangible rewards that a company is bound to receive should be ignore.

(a)  

The company should take into account such as factors as current market share, sales growth, profit improvement. Moreover, a review of sales for the last past three-five years including costs and profits by product line must be undertaken analyzing cost/volume/profit relationships and determining how they are affected by sales growth and cost reductions. The risk and cost to the company if the program fails must also be considered.

(a)  

-this plan must be clearly describe, that is, it is limited only to those managers who directly and significantly affect company performance.

-in this plan, it is generally important to provide separate incentive programs for different levels of management inasmuch as their efforts affect performance of the company in different ways.

(a)  

in this plan, it must be simple, easy to understand and implement. Any plan that is complicated may render the best intentions to nothing. Simplicity may be judged on the ease of determining whether managers themselves can easily calculate their rewards on the basis of given performance levels and bonuses.

(a)  

the rewards offered under this plan must be fairly substantial. Otherwise. Managers may not even give it a thought.

(a)  

- the maximum amount that any one manager can earn should beopen-ended, but based upon a percentage of the total profits thatwill be paid out. There are those who argue that above a certainpoint (never defined) “the man makes the job” and his rewards shouldnot be limited by a “classified” price tag.-Normally the “sharing rate” is approximately 10 percent ofthe increase in profits generated by the incentive plan. Obviously,the higher the sharing rate percentage, the more profits that will beconsumed by the rewards.

(a)  

For purposes of stressing emphasis on superior performance, no reward should be given for marginal improvement. Thus, for performance that does not reach a predetermined threshold, no bonus is paid. - The relationship between performance levels, no-bonus zones and bonus ceilings must be clearly defined and understood by the manager.

(a)  

the matter of payment of rewards should also be clearly spelled out. Receipt of incentive rewards on a deferred basis unless requested by managers for tax purposes. Could defeat the very purpose for which the plan has been instituted. It may make managers lose-enthusiasm on their jobs instead of exerting greater efforts toward increasing levels of productivity.

(a)  

Every incentive plan must be anchored on long-term company growth and profitability must be its sole basis.

(a)  

Management incentive plans can greatly improve company

(a)  

TYPES OF INDIVIDUAL INCENTIVES PLAN

TYPES OF SALES INCENTIVE PLAN

TYPES OF GROUP INCENTIVES PLAN

FIVE (5) FEATURES OF SCANLON PLAN

The Best 23 Employee Incentive Programs for the Modern Enterprise: