General Business BUS206 Lecture 11: Module 11 - Ch. 11 Overview 2
22 Sep 2020
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Profit sharing plans variable pay plans requiring a corporate profit target to be met before any payouts occur. Earnings-at-risk plans incentive plans sharing profits in successful years and reducing base pay in unsuccessful years. Incentives are derived as a function of the ratio between labor costs and sales value of production (svop) which includes sales revenue and value of goods in inventory. A ratio is calculated that expresses the value of production required for each dollar of total wage bill. Any savings arising from production of agreed-upon output in fewer than expected hours is shared by firm and workers. Two major components are vital to the implementation and success of a rucker or scanlon plan: The trend in recent variable-pay design is to combine the best of gain- sharing and profit-sharing plans. Along with having the financial incentive, employees feel they. The plan must be self funding have a measure of control.
