Goal Sharing: A group incentive plan that is designed to measure performance against future-oriented business objectives or performance targets (i.e., not against history). 

 

Incentive: Reward for a purchase or performance. Objects or events that are valued, which incite to action or effort. Something valued by an individual or group that is offered in exchange for increased performance. “A stimulus or condition that exists in an organization with the expectation of directing or influencing the behavior of organizational members” (Chung, 1972, p. 31).

 

Incentive Compensation: Variable rewards for performance or achievement of short-term or long-term goals. Designed to stimulate employee performance.

 

Incentive Eligible:  A term referring to groups or classes of employees who are eligible to participate in an incentive plan.

 

Incentive Marketing:  Incentive marketing is the device used to communicate and promote an incentive program to the target audience(s).

 

Incentive Program: Within the context of international compensation, any one of a variety of payments in excess of base pay made as an inducement either to accept, remain on or complete a foreign assignment. Plan that ties employees' earnings to their actual production on either an individual or group basis. A planned activity designed to motivate an individual to achieve predetermined organizationalobjectives. A program designed to reward specific behavior to achieve desired results.

 

Incentive System: An organized program of awards and/or recognitionoffered for the purpose of motivating employees in specific ways. Attributes of an incentive system include intentionality (deliberately developed with the intention of influencing employee performance); externality (devised and administered by agents external to the employee or employee group); standardization (applied in a clearly defined manner that specifies employees affected by the incentive system, the nature of the incentives and the rules for attaining specified rewards).

The program by which incentives are offered for the achievement of work goals and assessment procedures are identified and explained. The four types of incentive system formats or schemes are: quota, piece rate, tournament, fixed rate (Bonner, et al., 2000). Also, open-ended, closed-ended, and plateau type programs. IMS: Incentive Management System. Some companies refer to the platform management system used for incentive as an IMS.

 

Programs - Closed-ended: Incentive programs that have a pre-determined number of award earners. Incentive programs that have a fixed-awards budget.

 

Programs- Open-ended: A type of incentive program that enables all people who achieve program goals to earn awards. An incentive program format with an open-ended budget, awarding unlimited performance against stated objectives.

 

Perceived Value: What someone believes merchandise to be worth. To successfully sell premiums, the consumer must be convinced the proposed premium is worth putting forth the extra effort required to earn the item.

 

Plateau Programs:  A type of incentive program that provides awards at different levels of program achievement.

 

Point-Based Programs:  An incentive program where participants earn a universal currency of “points.” Points have no consistent value and can change by program through indexing.

 

Points Program: A type of incentive program where participants collect and redeem points for awards. Points programs also apply to reloadable (“Stored Value”) gift cards.

  

Premium: A product or service offered free or at a reduced price if the recipient performs some task, such as purchasing an item or meeting a sales quota. Generally to induce an individual to buy a product.

 

Prize:  Reward given to winner in a contest, sweepstakes or lottery, sometimes referred to as a sales incentive award. Anything of value awarded to winners, even if the value is nominal.

 

Productivity: Any index measuring the efficiency of an operation, usually involving a ratio of outputs to inputs or costs. Rewards frequently are tied to productivity-related measures.

 

Retention: The portion of the premium retained by an insurer to cover risk, expense charges, profit or contribution to surplus.

 

SHIAT: Abbreviation for Shipping, Handling, Insurance and Administration and Sales Tax. This is typically added to a merchandise item to derive a delivered cost. Short-Term Incentives: Rewards that are based on the attainment of short-term results of 12 months or less (e.g., net income).

 

Small-Group Incentive:  Any incentive program that focuses on the performance of a small group, usually a work team. These incentive programs are most useful when measurable output is the result of group effort and individual contributions are difficult to separate from the group effort.

 

Target Audience: A group of people or some sub-segment of a group, who has a propensity to purchase a company’s products and to whom a company markets their products.