MANA 443 Lecture Notes - Lecture 11: Piece Work, Merit Pay, Quality Control

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What is it? linking employees" pay with. Why is it important? these plans have a positive impact on performance if they are well designed and administered. Awards added into base pay based on rankings, behaviors, or results. Merit-pay increase percentage based on your performance rating and your. An end-of-year monetary payout that does not increase base pay. Message: if you want more money, you have to earn it. Merit pay increase matrix combine 3 variables: level of performance (performance rating, distribution of employees within pay ranges, merit budget increase percentage. Wage cuts because of poor performance is very rare. The question is how should we pay the average performer? keep their purchasing power the same. The guideline is the local or national consumer price index. If small latte is 1 last year and 1. 03 this year, then the cpi is 3%. The pay is based on the pieces you can finish given a time period.

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