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Explore types of financial incentives such as hourly wages, commission, profit-sharing, and fringe benefits to analyze their impact on motivation, job satisfaction, and productivity in the workplace.
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Learning Objectives • To know the alternative financial reward packages • To evaluate the alternative financial reward packages • Evaluate the impact of financial reward packages on job satisfaction, motivation and productivity
Main Types of Financial Incentives • Hourly or time wage rate - Normally paid per hour worked and receive money at end of week • Piece Rate – A fixed rate for the production of each unit • Salary - Normally an annual salary which is paid at end of each month • Performance related pay and bonuses- Usually only paid when certain targets have been achieved • Commission - Some workers, often salesmen, are partly paid according to number of products they sell • Profit related pay- A system whereby employees receive a proportion of company’s profits • Share options - common incentive for senior managers who are given shares in company rather than a straightforward bonus or membership of a profit sharing scheme • Fringe benefits - Often known as ‘perks’, these are items an employee receives in addition to their normal wage or salary e.g. company car, private health insurance, free meals
Task If you were a business manager which of these would you offer and why?
