The correct answer is option (1)- Policy.
The type of plan reflected in the scenario is Policy.
Phoenix Ltd.'s practice of distributing 10% of their profits among employees as incentives every year is a policy. It is a general rule or approach the company follows consistently to reward employees, but it doesn't detail specific actions or steps like a programme would. It establishes a framework within which specific incentive actions or programmes might be designed.
Policies are general statements that guide thinking or channelise energies towards a particular direction. Policies provide a basis for interpreting strategy which is usually stated in general terms They are guides to managerial action and decisions in the implementation of strategy. Policies can be flexible as they can be adaptable according to situations.
OTHER OPTIONS
- Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken. They are usually the simplest type of plans because there is no compromise or change unless a policy decision is taken. Rule have no flexibility so they prescribed about the do or don't in the company. Rules may come with consequences or penalties for non-compliance.
- Strategy provides the broad contours of an organisation’s business. It will also refer to future decisions defining the organisations direction and scope in the long run. Thus, we can say a strategy is a comprehensive plan for accomplishing an organisation objectives. This comprehensive plan will include three dimensions, (i) determining long-term objectives, (ii) adopting a particular course of action, and (iii) allocating resources necessary to achieve the objective. Whenever a strategy is formulated, the business environment needs to be taken into consideration. The changes in the economic, political, social, legal and technological environment will affect an organisation’s strategy.
- Programmes are detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action. Programmes will include the entire gamut of activities as well as the organisation’s policy and how it will contribute to the overall business plan. The minutest details are worked out i.e., procedures, rules, budgets, within the broad policy framework.
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