Practice 8　　Over the years, organizations have implemented incentive plans for a variety of reasons: high labor costs, competitive product markets, slow technological advances, and high potential for production bottlenecks. While these reasons are still cited, contemporary arguments for incentive plans focus on pay-for-performance and link compensation rewards to organizational goals. By meshing compensation and organizational objectives, managers believe that employees will assume “ownership” of their jobs, thereby improving their effort and overall job performance. Incentives are designed to encourage employees to put out more effort to complete their job tasks-effort they might not be motivated to expend under hourly and/or seniority-based compensation systems. Financial incentives are therefore offered to improve or maintain high levels of productivity and quality.　　Do incentive plans work? Various studies have demonstrated a measurable relationship between incentive plans and improved organizational performance. In a survey of organizations with more than 500 employees, conducted by the New York Stock Exchange,70 percent of organizations with gain sharing programs stated that those programs improved productivity. In the area of manufacturing productivity will often improve by as much as 20 percent after the adoption of incentive plans.