BU354 Lecture Notes - Lecture 17: Capital Accumulation, Capital Structure, Income Splitting
Document Summary
Chapter 12 pay for performance and financial incentives. *fixed pay: independent of the performance level of the individual, group, or org base pay and other forms of relatively consistent compensation (allowances) that help income stability. *variable: links pay with productivity, profitability, or some measure of org performance. An addition to base pay keeps base pay inflation controlled: top performers must get top pay to secure their commitment to the org. ^cash bonuses/incentives are the most common form of short-term incentives. Line of sight: extent to which a worker can relate daily work to overall corporate goals. Workers must understand corporate strategy important for effective variable pay plans. Goal = treat workers like partners; think of business goals as their own. Individual incentive plans give income over base salary to individuals who meet specific standard. Informal incentives: for accomplishments not readily measured (ex: exemplary customer service)
