After studying this chapter, you should be able to do the following:

12-1 Discuss the major reasons why companies use incentive pay.

12-2 Identify the advantages and disadvantages of both individual and group incentives.

12-3 Briefly discuss options for individual incentives.

12-4 Briefly discuss options for group-based incentives.

12-5 Discuss the major reasons why incentive plans fail and the challenges involved.

12-6 Identify the guidelines for creating motivational incentive systems.

12-7 Discuss the issue of executive compensation and how the major provisions of the Dodd-Frank Act affect the issue.

12-8 Briefly discuss the question of whether incentives improve performance and some options available for incentivizing employees other than knowledge workers.