BUS 272 Chapter Notes - Chapter 5: Profit Sharing, Performance Appraisal, Motivate (Company)

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 272
• Professor: Christopher Zatzick

Document Summary

How to pay: rewarding individuals through variable - pay programs. Variable - pay program - a pay plan that bases a portion of an employee"s pay on some individual and/or organizational measure of performance. Most common: pay raise/merit pay raise pay (0-5%) high perf: 5% = 2500 avg: 2. 5% = 1250 (5 extra dollars per day) low: 0. Nobody is really motivate to do extra work. People don"t think this as an incentive. This is link to past performance and future performance. Price - rate wages - employees are paid a fixed sum for each unit of production completed ex: ball park workers welling peanuts. Merit - based pay plans - employees are paid based on performance appraisal ratings due to the economy, people may not be actually given right amount of pay. May result in gender and racial discrimination in pay. Bonuses - employees are paid based on recent performance rather than historical performance, meeting the individual goal.