The Responsiveness of an Incentive Payment Scheme

Abstract

The design and administration of payment schemes present difficult problems for many large manufacturing organisations. These problems have been compounded in recent years by external factors such as unfavourable economic circumstances, high inflation rates and the constraints of government legislation and pay guidelines. It appears, however, that relatively little effort has been devoted by companies to assessing the effectiveness of their payment systems in the face of these pressures. This article is intended as a contribution to the development of appropriate methods of assessment which could be applied within organisations, using commonly available accounting and performance data.