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Chapter 17. Show Me the Money! > Incentive Pay Plans - Pg. 211

Show Me the Money! 211 Incentive Pay Plans Since the earliest part of the Industrial Revolution, companies have used financial incentives as part of their compensation programs. In many companies all compensation was based on "piecework." It was assumed that people would work harder and faster if they received a direct reward for pro- duction. This system was carried forward into the period of "scientific management." Frederic Taylor, the founder of this new movement, and his followers believed that people could be motivated by wages based on productivity and developed variations of the "piecework" pay system to achieve their goals. In an economy that is moving rapidly away from mass production and manufacturing-based busi- nesses to custom-engineered production and service-type industries, pay per piece has little value. New types of incentive programs have had to be developed. This section looks at some old and new incentive pay plans. Pay by the Amount Produced Team Builder