how to give incentives to workers working as teams

It is a bonus scheme under which bonus or premium is payable to a group of workers in place of individual workers.
Applicability :-
i) This plan is applicable where it is necessary to show collective interest in the work.

ii) Where output of an individual worker cannot be measured with ease.
iii) Where output is more dependent on the group efforts of workers.
iv) Where it is necessary that both direct and indirect workers would be rewarded.
Advantages :
i) It creates team spirit and leads to increase in output. This, in turn, lowers the cost of production.
ii) It eliminates excessive waste of time, materials etc.
Disadvantages :-
i) More efficient workers are not rewarded under this scheme.
ii) Difficulty arises as to the amount of incentive to be fixed and distributed.
Q.20. Give the meaning, advantages and disadvantages of profit sharing scheme.
Ans.: It is a scheme under which the employees are entitled to share the profits at an agreed percentage in addition to their wages. Workers can be given the share of profits in the form of cash or shares in the company.
Advantages :-
i) Efficiency of workers is recognised under this scheme which results in the increase in production.
ii) Labour turnover is minimised.

iii) More efficient workers are attracted to the organisation.
iv) Better co-operation of workers is obtained.
v) Permanent interest of workers in the future of the business is created if the share of profit is given in the form of shares in the company.
Disadvantages :-
i) It is difficult to fix the percentage of profit to be given to workers because workers may claim more share in the profit which the employer may not agree with.
ii) Profit is calculated at the end of the year and only at that time workers’ share of profit is given to them as incentive. Thus under this system, there is no provision of payment of incentive to the workers immediately after they complete a job. So it is very likely that workers may loose interest.
iii) Workers’ share profit in good years but do not bear the loss in bad years. It shows that their relationship with the company is like a fair weather friend.
iv) Workers have a suspicious look at the accounts shown by management as they do not understand the accounting and financial complicacies. So they think that they get less than reasonable share of profit.