Chapter 10
Management 3374 with Stevens at Texas Tech University
About this deck
By: Richard Williams
Created: 2010-12-07
Size: 19 flashcards
Views: 40
Created: 2010-12-07
Size: 19 flashcards
Views: 40
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bonus
Incentive payment that is supplemental to the base wage for cost reduction, quality improvement, or other performance criteria.
combined salary and commission plan
Has both a base salary and commission based on sales or performance to try and achieve the benefits of both compensation plans
differential piece rate
A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount.
employee stock ownership plans (ESOPs)
Stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees.
- The employer establishes an ESOP trust that qualifies as a tax-exempt employee trust under Section 401(a) of the Internal Revenue Code
- Stock bonus plans are funded by direct employer contributions of its stock or cash to purchase its stock.
- Leveraged plans are funded by employer borrowing to purchase its stock for the ESOP.
gainsharing plans
Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability.
Improshare
Gainsharing based on increases in productivity of the standard hour output of work teams.
lump sum merit program
Program under which employees receive a year-end merit payment, which is not added to base pay.
Advantages:
Provides financial control by maintaining annual salary expenses and not escalating base salary levels.
Contains employee benefit costs for levels of benefits normally calculated from current salary levels.
Provides a clear link between pay and performance.
merit guidelines
Guidelines for awarding merit raises that are tied to performance objectives.
perquisites
Perks
profit sharing
employee shares in profits of company (ex. commission)
salary plus bonus plan
Employees earn a salary plus commission as a bonus
Scanlon Plan
Rewards come from employee participation in improving productivity and reducing costs.
spot bonus
Unplanned bonus given for employee effort unrelated to an established performance measure.
standard hour plan
An incentive plan that sets pay rates based on the completion of a job in a predetermined “standard time.”
straight commission plan
Compensation plan based upon a percentage of sales.
Draw is a cash advance that must be paid back as commissions are earned.
Disadvantages:
Emphasis is on sales volume rather than on profits.
Customer service after the sale is neglected.
Earnings tend to fluctuate widely between good and poor periods of business.
Temptation to grant price concessions to get sales.
straight piecework
An incentive plan under which employees receive a certain rate for each unit produced.
straight salary plan
Compensation plan that permits salespeople to be paid for performing various duties that are not reflected immediately in their sales volume.
Advantages:
Encourages building customer relationships.
Provides compensation during periods of poor sales.
Disadvantage:
May not provide sufficient motivation for maximizing sales volume.
team incentive plan
Compensation plans where all team members receive an incentive bonus payment when production or service standards are met or exceeded.
variable pay
Tying pay to some measure of individual, group, or organizational performance.
About this deck
By: Richard Williams
Created: 2010-12-07
Size: 19 flashcards
Views: 40
Created: 2010-12-07
Size: 19 flashcards
Views: 40
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
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