Labour Theory

Question 1

Time rate

Answer 1

In a time based system, employees are paid a rate per hour for every hour worked, irrespective of the level output or how hard the employees work.

Question 2

Piece rate

Answer 2

Employees are paid a rate per unit produced. This method is often used in factories where large quantities of identical products are being produced.

Question 3

Flat rate

Answer 3

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).

Question 4

Bonus

Answer 4

A bonus may be paid above and beyond an employee’s normal wage. It is often given if targets are met and axceeded. It can motivate staff to work harder.

Question 5

Commission

Answer 5

This is when staff are paid a percentage of the value of sales made. Commision is gnerally paid where specific targets have been met and is on top of a small basic salary.