Gina's company recently instituted an Improshare plan in order to improve the timeliness of production and decrease the cost per unit of product. The organization explained to each employee that they had to now inspect and assemble 25 parts in one hour rather than just 20 parts. Gina felt this was a reasonable goal knowing that there were days where she had been able to work ahead and produce more than expected. However Gina's manager did not explain how the time savings would be translated into a dollar amount of a bonus for each employee. Therefore employees in Gina's work area were not producing at the required level, as they did not understand the impact on their wages. This is an example of not meeting which criteria of an effective incentive plan?

Question

Quizplus · Accepted Answer

The scenario indicates that employees did not understand how their increased productivity would translate into a bonus, highlighting a lack of clarity and ease of understanding in the incentive plan.

Gina's Company Recently Instituted an Improshare Plan in Order to Improve