Group incentives
Incentives can also be paid to group of employees. They are used when it is difficult to measure the contribution of each employee to output and/or when team work is important. The performance of the entire group determines the pay increase.
Gainsharing – is more than a group incentive scheme. It is a part of total quality management or philosophy. The main characteristics include costs under employee control, trusting relationship between managers and employees and competent work force. The oldest example is Scanlon plan (first used during 1930’ in steel industry). The rewarding is based on contributions of employees on suggestions which would lead to rise of productivity of work.
Profit sharing – is established as some percentage of profits, which is divided among the employees. The individual pay increase depends on position in hierarchical structure, on age (experience), on individual performance etc. These payments can be also divided more times a year. The point is to identify more closely with company and bring the attention of employees on the profit goals of the company.

EVALUATION OF PAY-FOR-PERFORMANCE SYSTEMS
Is money important?
Money is important only to satisfy one’s needs e.g. physiological, security and esteem needs. If these needs are satisfied by other means, then money is not useful in motivating performance. This fact is not recognized by some managers, who overestimate the importance of money.

Should pay increases be based on performance?
Generally, workers, managers and salespersons believe that pay increases should be mainly based on performance. But especially blue–collar workers often argue against, what could be caused by lack of confidence in proper administration of incentive schemes. On the other hand, it is hard to create the pay–for–performance increase schemes for public sector jobs e.g. teacher. It would be impossible to pay teachers according to performance of their students.

Are Pay Increases Related to Performance?
Research done in recent years in USA show, how is pay tied to performance attractive for most employers and employees as well. Some 82% of researched companies claim the pay-for-performance programs are successful. Despite these findings there is some evidence that organizations are moving away from this type of compensation. However, no one could give us clear answer to given question.

NEGATIVE EVIDENCE
Are incentive programs good for the company or bad for morale? It depends on whether the rewards help support corporate goals, such as increased profit and customer loyalty, or if they merely engender unhealthy competitiveness and back-stabbing among employees. Rewards can also undermine collaboration and teamwork. Well known are cases when craftsmen were stealing parts from other craftsmen to meet quotas.
Incentive programs create competitiveness what is not always necessary to a company. However, some managers claim, that if you want people motivated to do a good job, give them a good job to do.
In addition, money need not be the best motivator of the employees, they can be motivated because they're excited about their jobs or because they're doing something that provides a service to the company or even to the community.
Therefore, some companies offer an unique and creative compensation package that includes bonuses as well as non-cash recognition ranging e.g. from personalized plaques to country ranch parties, movie tickets to golf lessons, team shirts and jackets to footballs and train kits. Despite mountains of evidence to the contrary, many managers still believe that money is more rewarding than recognition and appreciation.
Another problem could be the periodicity of payments. Everyone has a need to be recognized, and not just once a year when there's a formal review process. This problem is significant mainly when talking about gain- and profit sharing plans. To add, employees obtain no financial reward in “bad” years according to profit sharing plans.

PROS AND CONS OF PAYING FOR PERFORMANCE
The following may make you decide against pay – for – performance increases:
§Employees who are motivated by their work's value may find tasks less attractive if cash incentives are involved.
§Many employees like the security of regular salary increases.
§Managers may have difficulty making distinctions between employees' performances and give everyone the same salary increase.
§If salaries only are adjusted once per year, pay-for-performance raises are not immediate motivators.
§Employees may think you are trying to keep compensation low by switching to a pay-for-performance system.