MHR 523 Lecture Notes - Lecture 8: Piece Work, Capital Accumulation, Organizational Culture
11 Jun 2016
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Fixed pay: compensation independent of performance level including base pay and allowances. Variable pay: any plan that ties pay to productivity or profitability. Operations employees: oldest and most commonly used plan, based on production standard, straight piecework plan, guaranteed piecework plan, differential piecework plan. Individual rewards: capital accumulation stock options, performance share units plan, appropriate link to strategy. Salespeople: salary plan fixed, commission plan pay in direct proportion to sales generated, combination plan base salary plus commission. Set standards for each member of the group. Set standards for the group as a whole. Use a group define measure of performance. Define internal and external issues facing the company. Group executive compensation components into a whole plan. Check plan for legal compliance and tax effectiveness. Review and evaluate plan whenever a major business change occurs. Profit sharing plans: share in the company"s profits divided among employees. Stock ownership plan: trust distributes the stock to employees based on plan.
