Labour Flashcards
What are the five ways employees can be paid?
Employees may be paid using the following methods: Time rate Piece Rate Flat rate Bonus Commission
Describe the term time rate.
In a time based system, employees are paid a rate per hour for every hour worked, irrespective of the level of output or how hard the employees work. This method is used when it is difficult to measure output per worker eg clerical staff, when all workers are carrying out the same type of work or when quality of work is more important than quantity.
Describe the term piece rate.
Employees are paid at a rate per unit produced. This method is often used in factories where large quantities of identical products are being produced.
Describe the term flat rate.
This refers to a pricing structure that charges a single fixed fee for a service. This is commonly used by hairdressers and gardeners (for one off gardening jobs).
Describe the term bonus.
A bonus may be paid above and beyond an employees normal wage. It is often given if targets are met and exceeded. It can motivate staff to work harder.
What is meant by overtime?
The overtime rate is an extra amount paid for each hour worked over the basic working week. The amount of overtime pay will depend on when the extra hours are worked. It is usual for overtime worked on a Saturday and Sunday to be paid at a higher rate than if worked on a weekday.
Describe what is meant by commission?
This is when staff are paid a percentage of the value of sales made. Commission is generally paid where specific targets have been met and is on top of a small basic salary. This encourages sales people to sell as much as possible- the more sales they make the more they earn.
