An ideal incentive plan must possess the following features:

(i) Simplicity – The plan should be simple to understand and operate. Who should be able to calculate their wages without any difficulty?

(ii) Acceptability – It should be acceptable to workers as well as the employer.

(iii) Flexibility – The incentive plan should be flexible to introduce nice changes.


(iv) Quality – The plan should ensure the quality of the output. Workers should be discouraged to speed up the work to earn more wages at the cost of quality.

(v) Stability – The plan should give a stable earnings over a period of time, minimum but adequate wage must be ensured.

(vi) Wide coverage – It should cover the maximum number of workers. 1 direct as well as indirect worker should be covered.

(vii) No restriction on earnings – The plan should not have any restriction earnings of workers. They should be allowed to earn as much as they can.


(viii) Investigation and evaluation – The plan should be based on scientific investigation and evaluation to produce good result. Standard time should fix on the basis of time and motion study.

(ix) Increasing output and lowering cost of production – It should aim increasing output and lowering cost of production.

(x) Motivating to earn more – The plan should motivate the workers increase their efficiency and earn more.

The success of an incentive plan depends on the mutual cooperation a understanding between employer and employees.