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Payment and Rewards (Financial Rewards :money_with_wings: (Piece Rates…
Payment and Rewards
Financial Rewards
:money_with_wings:
Piece Rates
Payment based on number of products produced
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rewards productivity but may result in worse quality or risk of harm to the worker due to a rushed production
Commission
Payment based on attaining targets (ie. No. Sales)
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piece rates for service based industry
Time Rate
Payment based on hours worked
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useful when workers’ production is difficult to measure
Performance-Related Pay (PRP)
Used to motivate workers with difficult to measure outputs such as in the financial sector and public sector
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works best when appraisal system is used to evaluate staff performance. This may result in favouritism, over demand or blame on other workers, however.
Bonus Payments
An addition to wages
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used as a motivator
Profit Sharing
Staff receive a share of the profit
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Motivates workers to produce more for profit, unites worker and shareholders, and shows appreciation. If a loss is made due to a circumstance beyond an individuals control (ie. a new competitor) it may demotivate the workers, especially if they worked hard despite the businesses failure
Share Ownership
Shares are given to workers
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have part ownership in the business, but the value of shares varies, resulting in differing gains depending on the state of them
Non-Financial Rewards
:gift:
Job Enlargement
Workers are given more work
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prevents work stagnation also, however too much addition could demotivate
Job Enrichment
Workers given greater responsibility or a more credible position
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motivations increased, but may want a pay rise
Job Rotation
Workers do different (yet similarly demanding) jobs
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prevents work stagnation and increases motivation, however the replacement job may be as boring
Fringe Benefits
Additional Bonuses that are not art of a workers main income
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subsidised meals, company cars, gym memberships etc... could be seen to be more bauble than their intrinsic worth. However, small businesses with limited budgets and size may not be able to carry out these benefits