MHR 749 Lecture Notes - Lecture 11: Lump Sum, Piece Work, Profit Sharing
8 May 2017
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Document Summary
Pay for performance plans are popular because of competition from foreign competitors, fast-paced business environment and it"s a signal away from. They have a proven track record of motivating better performance and entitlements helping cut costs. Motivate better employee performance and can attract/motivate employees. Merit pay: increase in base pay related to past performance , subjective and expensive and doesn"t improve employee and corporate performance. Lump sum bonuses: end-of-year bonuses that do not build into base pay: viewed as less of an entitlement than merit pay, less expensive than merit pay over long run. Individual spot awards: awarding employees for exceptional performance on a special project. Individual incentive payment plan: a pay for some objective, pre- established level of performance. Increased turnover among new employees discouraged by the unwillingness of experienced workers to cooperate in on-the- job training: elevated levels of mistrust between workers and management. Straight piecework plan: wages are determined by how much products you make.
