HRM303 Chapter Notes - Chapter 5: Employee Stock Option, Motivation, Profit Sharing

• School: University of Waterloo
• Department: Human Resources Management
• Course: HRM303
• Professor: Vince Di Ruzza

Document Summary

Pay system under which individuals receive a specified sum of money for each unit of output they produce or process. Objective is to maximize individual productivity by linking output to reward. Straight piece rate: same specified sum of money is paid for each piece produced or processed, regardless of how many pieces are produced or processed. Differential piece rate: lower sum of money per piece is paid if employee production does not meet the production standard, and then a higher sum per piece is paid once the production standard is met. Advantages: highly motivational in producing task behaviour because they tie valued rewards to clearly specified performance outcomes a. Disadvantages: can only be applied in limited number of circumstances (jobs with high. Jobs where individual workers control their own production, interdependence between workers is low. Each unit of production can be easily measured and priced. Pay that is geared to the dollar volume of sales or transactions conducted.