Management and Organizational Studies 2181A/B Chapter Notes - Chapter 6: Merit Pay, Lincoln Electric, Absenteeism

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2181A/B
• Professor: Tony Francolini

Document Summary

Piece rate: a pay system in which individual workers are paid a certain sum of money for each unit of production completed. Various systems that link pay to performance on production jobs. Lincoln electric company uses an intricate piece-rate pay plan that rewards workers for what they. Introduction of way incentives usually leads to substantial increases in productivity produce: employee turnover is very low, makes good profit every quarter, has(cid:374)"t laid a(cid:374)yo(cid:374)e off for (cid:373)ore tha(cid:374) 40 years. Lowered quality: sometimes argued that wage incentives increase productivity at the expense of quality. Incompatible job design: the way jobs are designed can make it difficult to implement wage incentives ex. assembly line it is almost impossible to identify and reward individual contributions to productivity. Restriction of productivity: the artificial limitation of work output that can occur under wage incentive plans (so(cid:373)e (cid:449)orkers (cid:272)o(cid:373)e to a(cid:374) i(cid:374)for(cid:373)al agree(cid:373)e(cid:374)t a(cid:271)out (cid:449)hat (cid:272)o(cid:374)stitutes a fair day"s (cid:449)ork a(cid:374)d artifi(cid:272)ially li(cid:373)it their output accordingly)