MGMT 104 Lecture Notes - Lecture 4: Reward System, Peer Pressure, Motivation
Document Summary
How much emphasis to place on financial compensation as a part of the total reward system. How much emphasis to place on attempting to hold down the rate of pay. Whether to implement a system of individual incentives to reward differences in performance and productivity, and if so, 4 decisions about pay: how much emphasis to place on these incentives. Labor rates and labor costs are the same thing. If higher productivity surpasses higher wages, the labor cost is not necessarily more: labor rate = total salary/time worked, labor cost- takes productivity into account; calculates how much a company pays its people and how much they produce. You can cut labor costs by cutting labor rates. Hiring less expensive people could mean hiring slower, inexperienced people, increasing labor costs. To lower labor costs, you need to address labor rates and productivity. Labor costs are a significant portion of total costs. This is only sometimes true and varies across industries.
