Disadvantages of Incentive based compensation
- Tendency of quality of products deteriorated due to increased output and low cost
- Employees may oppose introduction of new machines
- Workers demand for minimum wage limit may go up due to high incentive earnings
- Sometimes employees may disregard security regulations due to payment by results approach adopted for higher incentive figures
- Overworking may affect employee health
- Employee jealousies with respect to high and low performers
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