BU354 Chapter Notes - Chapter 12: Merit Pay, Piece Work, High Tech
Document Summary
Variable pay any plan that ies pay to producivity or proitability. Incenives for operaions employees: piecework plans a system of pay based on the number of items processed by each individual worker in a unit of ime, such as items per hour or items per day. Straight piecework plan a set payment for each piece produced or processed in a factory/shop. Incenives for senior managers and execuives: short-term incenives: the annual bonus. Three basic issues should be considered when awarding short-term incenives: 1) eligibility decided in one of three ways: Non-deducible formula straight percentage is used. Deducible formula assumes that the short-term incenive should begin to accumulate only ater the irm has met a speciied level of earnings. Split-award method breaks the bonus into two parts; individual and organizaion performance. Muliplier method bonus is a product of individual and corporate performance; when either is very poor, the product is zero.
