Chapter 6 Flashcards
Piece-rate
A pay system in which individual workers are paid a certain sum of money for each unit of production completed
Wage incentive plans
Various systems that link pay to performance on production jobs
Why are wage incentive plans great?
- They increase employees’ productivity
- Decrease turnover
What are potential problems with wage incentive plans?
- Lowered quality
- Differential opportunity
- Reduced Cooperation
- Incompatible Job Design
- Restriction of Productivity
Restriction of Productivity
The artificial limitation of work output that can ovcur under wage incentive plans
Merit pay plans
Systems that attempt to link pay to performance on white-collar jobs
What are potential problems with merit pay plans?
- Low discrimination
- Small increases
- Pay secrecy (should inform employees of the average raise received by those doing similar work)
Lump sum bonus
Merit pay that is awarded in a single payment and not built into base pay
Profit sharing
The return of some company profit to employees in the form of a cash bonus or a retirement supplement
Employee stock ownership plans (ESOPs)
Incentive plans that allow employees to own a set amount of a company’s shares and provide employees with a stake in the company’s future earnings and success
Gainsharing
A group pay incentive plan based on productivity or performance improvements over which the workforce has some control
Skill-based pay
A system in which people are paid according to the number of job skills they have acquired
Job design
The structure, content and configuration of a person’s work tasks and roles
Job scope
The breadth and depth of a job
Breadth
The number of different activities performed on a job
Depth
The degree of discretion or control a worker has over how work tasks are performed
Job rotation
Rotating employees to different tasks and jobs in an organization