Also incentives can be introduced to encourage individual or teamwork and employee cooperation. Rewards depend on certain outcomes that the employee or the team affects e.g. commission and piece-rate. Incentive compensation programs allow the organization to increase its remuneration competitiveness relative to other organizations. This signals to employees the organization's willingness to reward high performance and help keep efficient employees. There are different types of incentives designed for individuals e.g. commission, small groups e.g. gainsharing and large groups e.g. bonus or profit sharing plans. Incentives are rewards given to employees who reach a certain established or agreed targets. Non-monetary incentives e.g. awards focus on recognizing employee special efforts, innovation and creativity. Incentive compensation programs can be short-term programs or long-term programs. Short-term programs focus on immediate results or performance in a short period of time e.g. project rewards and sales incentives. Longer-term programs involve the greatest number of organizational members and focus on long run performance and achievement e.g. profit-sharing plans and gainsharing programs. .
For example, a company called Monsanto, which is considered the world leader in plant biotechnology, has over 15,000 employees in 60 countries worldwide . The company uses various incentives plans to reward and motivate its mangers. Monsanto uses different mechanisms to recognize its manager performance and reflect how they performed against the agreed goals. The company has reduced its dependence on base salary in the overall compensation package and placed a greater emphasis on incentive compensation. The company has different levels of incentive compensation. The first level is directed at the individual. The pay for performance method is most effective when it is based on aspects that are under the employee control.