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Group incentive programs are award programs that deliver lump–sum cash payments, time–off awards, and/or informal recognition items to groups of employees who meet or exceed pre–established levels of organizational performance. Designing effective group incentive programs can be key to achieving organizational goals.
Group incentive programs can cover groups of employees as large as an entire agency or as small as a work unit or team. No matter how large or small the group, an incentive program should include the following design features:
Group incentive programs require reliable, accepted measures of performance. The program must express desired goals in terms of those measures. The measures can be quantitative or qualitative and are sometimes expressed in financial terms.
Group incentive programs must select a time frame to measure the group's performance, for example, annually or quarterly. Effective incentive programs ensure clear communication with employees about program time-frames and expectations.
Organizations should grant group incentives based on the goals established at the beginning of the performance period. Payouts are made at the end of the performance period each time a group meets or exceeds the established goal(s).
Programs should have clear, understandable payout formulas. If the goal requires some kind of financial gain or savings, those savings usually are split between the agency and the employees. If the goal is to improve performance to a certain level, organizations should distribute funds specifically budgeted for the incentive program.
High involvement of employees and their representatives at all stages of program design and implementation increases the likelihood that they will understand and accept the program. Involving employees has the unique advantage of allowing them to understand the overall objectives of the organization as well as their specific role in meeting those objectives.
Group incentives are powerful but time-consuming management tools. Organizations must commit to a high level of communication and participative management. The program's success depends on the level of upper-management support it receives.
In the Federal Government, agencies frequently use two forms of group incentive programs – gainsharing and goalsharing.