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Jan 2011
Policy Name: Incentive Plan Effective Date: 01/01/2011
Policy Number: HR005 Edition: One
Table of contents
1. Definitions....................................................................................................................3
2. Scope...........................................................................................................................3
3. Policy............................................................................................................................3
4. Guidelines...................................................................................................................4
5. Accountability..............................................................................................................6
6.Procedures...................................................................................................................7
7. Forms...........................................................................................................................8
8. Approvals...................................................................................................................10
9. Appendixes...............................................................................................................11
1. Definitions
1.1 Senior managers: Regardless the actual titles, the senior manager within
{Company Name} accountable for establishing the direction of {Company Name} by
participating in its strategic plan, and overall objectives.
1.2 Managers: Regardless the actual titles manager within {Company Name}
accountable for directing a function and/or has a supervisors reporting to him/his.
1.3 Supervisors: Regardless the actual titles, supervisors are individuals
accountable for directing the employees performing the actual work of a function.
1.4 Performance measures: objectives assigned to senior managers, managers, and
supervisors.
1.5 Incentive scales: Predefined degrees, an employee can get a specific degree
achieving a predefined performance measure.
2. Scope:
This policy and procedure applies to all Full-Time employees in {Company Name} .
3. Policy
It is the policy of {Company Name} to provide competitive incentives to motivate its
employees to do their best and align their contributions to help {Company Name} in
achieving success.
Incentive plan policy will be implemented systematically on equitable and merit
basis.
4. Guidelines
4.1 All performance measures and incentive scales should be approved before 1 st
of January.
4.2 All performance measures:
4.2.1 Should be specific, measurable, achievable, realistic, and time-frame.
(SMART Measurers).
4.2.2 Should not be more than 8 eight measures.
4.2.3 Should not be less than 4 four measures.
4.2.4Should not be submitted before an employee gets inputs from his/her
manager.
4.3 Any employee joining after 1st of January will be eligible to an incentive plan
policy as a percentage from date of hire.
4.4 The maximum incentive entitlement of any eligible employee cannot exceed
four gross salaries. Any exceptions will need to be approved by the General
Manager.
4.5 All Incentives will be calculated based on the gross salary of the previous
fiscal year.
4.6 In case of employee resignation / termination, he will not be eligible to the
incentive plan policy. Exceptions to this policy will need to be approved by the
General Manager.
4.7 Senior managers should submit their performance measures before 1 st of
october.
4.8 Managers should submit their performance measures before 1 st of november.
4.9 Supervisors should submit their performance measures before 1 st of
december.
4.10 All performance measures should be approved after one week from date of
submitting them.
4.11 Incentive scales determined at the same time of approving performance
measures.
4.12 Incentive plan policy forms should be saved in a master incentive file in
human resources department, and copies published to eligible employees.
Where is:
4.14.1 Employee gross salary =
Basic salary + transport allowance + special allowance + cash allowance
4.14.2 Company performance rate:
To determine the company performance rate we should predefine the following:
1.The Company performance measure or measures and the related incentives scale.
2. The actual company performance.
Appraising A B C D H
Rate 1 .75 .5 .25 0
5. Accountability
6. Procedures
Senior
6.2.1 Sets the company performance measure/s and incentive scales
6.2 Management
to general manager.
Committee
Eligible
6.4 Employee 6.4.1 Participate with your supervisor in filling an incentive plan form.
* For procedures purposes supervisor defined as: any person supervise an eligible
employee.
7. Forms
7.1 Incentive plan form. (See Page Number 9 )
7.2 Employee apprising form. (See Policy Number HR007:Performance Apprising)
TOTAL
8. Approvals
Mr. {Name}
General Manager
Mr. {Name}
Assistant General Manager
Mr. {Name}
Assistant General Manager
(Manufacturing)
Mr. {Name}
Financial Manager
Mr. {Name}
Internal Auditor
Mr. {Name}
Sales Manager
Mr. {Name}
{Title}
9. Appendixes