MGMT1135 Study Guide - Midterm Guide: Variable Cost, Profit Sharing
Document Summary
How to pay: rewarding individual employees through variable-pay. A number of organisations are moving away from paying people based solely on credentials or length of service and towards using variable-pay programs. It turns part of an organization"s fixed labor costs into a variable cost reduce expenses when organizational performance is lower than usual. When pay is tied to performance, lower performers" pay stagnates while high performers enjoy pay increases help retaining high performers. Piece-rate plans (2) merit-based pay (3) (4) (5) A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. E. g. , fruit picking in australia, pay is determined by the volume of fruit an employee picks. Not a feasible approach for many jobs. The main concern for both individual and team piece-rate workers is. Many organisations use a modified piece-rate plan. (base hourly wage + a piece-rate differential)
