Effectiveness of the incentive system: methods of assessment

In the article the authors propose their own methods of assessing effectiveness of incentive systems. The technique involves a four-stage analysis of such a system, which consists in successive conducting social research, studying expert opinion, calculating general and specific indicators to measure the incentive system effectiveness. The questionnaires used for the social research allow for finding out the employees' opinion on the incentive system at their company. The research results are studied with the help of the SWOT-analysis. It is proposed to engage senior and middle managers in acting as experts. The article describes commonly applied general indicators of the incentive system effectiveness, such as «zarplatoemkost», «zarplatootdacha», and others. Main disadvantages of these indicators are also shown. In order to overcome these disadvantages, it is suggested to use specific indicators, including the integral index of effectiveness evaluation and the correlation index. By the «integral indicator» is meant a weighted average estimate of implementing key performance indicators (KPI) for a company's department over a certain period divided by the bonus payment per employee (also calculated for this department for the corresponding period). The term «correlation index» refers to an indicator of the level of linear correlation between the weighted average estimate of KPI implementation for the department over a number of periods and bonus payment per employee for the corresponding periods, with regard to the ratio of wages earned by separate groups of workers. The article presents the process and results of testing the proposed methodology at an oil and gas company. The use of the authors' methods will make it possible to detect shortcomings in the functioning of incentive systems in time, and thus to prevent negative consequences as well as improve effectiveness of the incentive system at the enterprise.