Incentive Bonus Systems

St. Joseph Lead Company has been paying incentive bonuses for well over 40 years. In 1958 almost half of St. Joe's 1,860 employees in Southeast Missouri received some form of incentive bonus in addition to their guaranteed wages. There are very few payroll jobs in St. Joe s Southeast Missouri organization that lend themselves to a reasonably good measurement of production or quality, or both, where an incentive bonus is not paid. The term "Incentive Bonus" is used to differentiate betwen bonuses that are based on quantity or quality of work, and those that are merely additional pay of a standard amount per hour or day because of an employee being temporarily assigned to some unusual task, An employee temporarily assigned to a job where the working conditions make the job performance unusually difficult or where a special skill is used is often given a bonus of some standard amount per hour or shift in addition to his usual rate. This is merely a convenient way of paying something extra without disturbing the normal rate structure. Actually, it is differential pay similar to that almost universally paid for evening and night shift work. Bonuses of that type are not being considered in this paper. The basic reason or theory for paying incentive bonuses 9s to get improved production at lower cost, Unfortunately, it is often difficult, if not impossible, to find a yardstick by which it can be definitely proved that a particular bonus plan is accomplishing its purpose, It becomes, then, a matter of judgment on the part of management personnel as to the value of the bonus plan. The fact that St. Joe Lead Company has continued to pay bonuses for over 40 yews and has increased the number of bonus schedules used attests to a definite belief that they are beneficial to the company's successful operations.