LO 13-5 Describe how organizations

LO 13-5 Describe how organizations combine incentive plans in a “balanced scorecard.”∙ A balanced scorecard is a combination of performance measures directed toward the company’s long- and short-term goals and used as the basis for awarding incentive pay.∙ Typically, it includes financial goals to satisfy stockholders, quality- and price-related goals for customer satisfaction, efficiency goals for improved operations, and goals related to acquiring skills and knowledge for the future.∙ The mix of pay programs is intended to balance the disadvantages of one type of incentive with the advantages of another type.∙ The balanced scorecard also helps employees to understand and care about the organization’s goals.LO 13-6 Summarize processes that can contribute to the success of incentive programs.∙ Communication and participation in decisions can contribute to employees’ feeling that the organization’s incentive pay plans are fair.∙ Employee participation in pay-related decisions can be part of a general move toward employee empowerment.Employees may put their own interests first in developing the plan, but they also have firsthand insight into the kinds of behavior that can contribute to organizational goals.∙ Communicating with employees is important because it demonstrates that the pay plan is fair and helps them understand what is expected of them. Communication is especially important when the organization is changing its pay plan.