Motivation: from concepts to applications - Using rewards to motivate employees

7 important questions on Motivation: from concepts to applications - Using rewards to motivate employees

What is a piece-rate pay plan?

A pay plan that provides no base salary and pays the mployee only for what he or she produces.

What is a major limitation of a piece rate pay plan?

It's not a feasible approach for a lot of jobs because although it offers a motivating and relevant incentive for some jobs it is unrealistic to think they can constitute the only piece of employees' pay.

What is a merit based pay plan?

A pay plan based on performance appraisal ratings. It allows employers to differentiate pay based on performance. It also creates perceptions of relationships between performance and rewards.
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What is  major limitation of a merit based pay plan?

It is based on annual performance appraisal and unions typically resist merit-based pay plans.

What are bonuses? And what is its major downside?

A pay plan that rewards employees for recent performance rather than historical performance. Its downside is that employees pay is more vulnerable to cuts.

What is skill based pay? And what is its major downside?

A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do. Its major downside is that people can learn all the skill and it doesn't adress performance.

What is a profit sharing plan?

Organization wide programs that distribute compensation based on some established formula centered around a company's profitability.

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