BU352 Lecture Notes - Lecture 12: Piece Work, Industrial Engineering, Job Evaluation
Document Summary
Money and motivation fixed pay compensation that is independent of the performance level of the individual, group, or organization. Variable pay any plan that ties pay to productivity or profitability on average, organizations spend 11% of total pay-related spending on variable pay-related expenses. 84% employers have >1 types of variable pay plans in place. 87% have short term incentives in place variable pay facilitates management of total compensation by keeping base pay inflation controlled. However, the premise is that top achievers must get top pay to secure their commitment to the organization. Accurate performance appraisal /measurable outcomes is a precondition of effective pay- for-performance plans. Another premise is the line of sight employee can relate his daily work to the overall achievement of overall corporate goals. Employees need to understand the corporate strategy and how their work as individual employees is important to the achievement of strategic objectives.
