BU354 Chapter 12: Textbook - Chapter 12 Pay for Performance and Financial Incentives
Document Summary
In order to attain motivated employees, use both fixed pay and variable pay (i. e. base pay and then paid for performance beyond that: usually paid in cash bonuses or incentives based on how well you perform. Top performers must get top pay to keep them committed to the organization. Don"t focus too much on those last points, because they will be discussed in the following sections. Piecework plans earnings are directly tied to what the worker produces i. e. you earn sh. 40 for each pair or headphones you assemble. Every product you produce over min wage you get paid extra: differential piece-rate plan just like the guaranteed piecework plan but the worker is paid at a particular rate for each piece that he or she produces. When job evaluation brings in new hourly rate, the piece rate must be revised which takes a lot of work.
