BUS 272 Chapter Notes - Chapter 5: Employee Stock Ownership Plan, Performance Appraisal, Profit Sharing

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

Document Summary

Organizations can use piece-rate wages, merit-based pay, bonuses, stock options & employee stock ownership plans to motivate employees. But making job themselves motivating more effective. Process of initially setting pay levels entails balancing internal equity (job evaluation) & external equity (pay surveys) Piece-rate wages = pay employees w/ fixed sum for each unit of production completed. Merit-based pay = pay for indiv performance based on performance appraisal ratings. To be effective, indivs need to perceive strong relationship b/t performance & rewards. Typically based on annual performance appraisal, only valid as performance ratings. Pay raise pool fluctuates based on economic/other conditions that have little to do w/ indiv"s performance. May result in gender & racial discrimination. Bonus = reward employees for recent performance rather than historical performance, one-time rewards. Rewarding based on financial measures can cause problems, better to split into categories so employees don"t feel like they missed out .