Three advantages of offering a piece-rate pay plan for Metropolitan Furniture is employee motivation, cost effectiveness, and quantity produced. Paying employees on a piece rate plan allows the employee to determine how hard they will work on a daily basis. If the employee know that their pay will be directly affected by how hard they work then they are more likely to always give a hundred and ten percent. Niemesh explains “others value a high income over leisure time and are willing to work more hours to achieve it (Niemesh, 2006). “More than three-quarters of employers (76%) say pay helps to motivate staff, according to the exclusive Employee Benefits/Lorica 100 Club research, published in June 2014 (Bettelley, 2014)”. The incentive of making
when choosing the amount of the base pay. The general pattern is that more incentive
Quality of employees work is very critical for company’s success. If planned properly, incentive pay plans may increase employee’s interest in providing better service. This paper discusses
I also agree with his claim to replace the current low hour rate with the higher piece rate in order to keep more experienced employees staying at work and dramatically reduce the waste in time and money for training and outfitting new employees. Since an experience employee can produce a casting in only 20% of the time it takes a new worker, it is very important to keep them stay working in the foundry in term of maintaining high productivity and quality. To encourage them to stay, Jones Ironworks needs to raise their wage to some extent. It’s rather worthwhile and reasonable to do it according to the Freddie Jones’ demonstration: paying with piece rate, the actual increase in cost per hour is only around 13% over the current cost, but it can save the company more than 10% in labor productivity and 6% of total payroll due the elimination of the waste in training and outfitting the new employees.
This schedule of reinforcement is the logic behind factory piecework, where workers are paid by the number of items produces rather than the number of hours worked.
carefully planned out and considered, the total closure or failure of the organization could be at hand in the near future. In our modern age, employers know that salary is not the only factor that should be considered and that salary alone will not lead to better or more highly profitable workers alone. This is why compensation planning is important and why pay should have some connection between performance and compensation. This is why the human resources department should consider many monetary and non-monetary factors when considering how to properly compensate and motivate employees (Dessler, 2013).
Production line workers are the employees who are usually doing their work by hand or in this day and age, running the machine or equipment to make the products. In this particular case, Canada Chemicals Corporation utilizes their production employees by producing industrial chemicals. These production worker’s jobs are a lot more complete then other production level workers employees as they usually have plenty of skill, knowledge and experience, and have high educational background. In order to reverse recent challenges with production and sales, I have composed a compensation package for these employees that will motivate them intrinsically, and focus on rewards that are extrinsic.
Individual incentive pay plans reward employees for meeting one or a combination of performance standards (e.g. productivity, safety, or attendance) set by the employer (Martocchio. 2013). Piece- rate pay is one of four individual incentive plans offered in the employment industry. Employers have two options to select from when choosing this incentive plan. The first option is compensating the employee hourly for each piece over the given production number. The second option is compensating employees based on established subjective (quality) and objective (quantity) performance standards. In both options the employee is, essentially, being compensated for the work he or she does and not what could have been completed (Gibbons. 1987). Motivation,
Summary: Commission based employment can appear to be a transparent reward structure based on success and is a common way to reward top performers. “Commission based pay can make the employee feels they are sharing in the organizations success which motivates the individual to maximize their success” (Clark, Robert, and Sylvester Schieber Fourth Quarter 2000). This compensation strategy allows employees to work hard and get further. The theory with harder work more pay will occur. The employee is paid based on how they perform or how much they sale. If they sale or make more the more they will be
He insisted it would increase business since more workers would want to work for Ford Motor Company. This shows that it’s important to treat your employees to gain great business return or we can consider this as an investment. It decreased the turnover problem in Ford’s business because more skilled workers decided to stay at the plant due to better payment. This greatest payment plan also decreased time and cost to train new employees as many previously left the company for better pay or
The alternative directly compared to piecework for the purpose of this study was a flat hourly wage. Some classes of employees at Dexter are compensated in this manner, so it was possible to observe the different behaviors and some work habits of both piecework and flat hourly personnel.
Thereafter, the 3rd through the 5ht percent will be match by $.50 for every dollar contributed. This compensation package will also include a health spending account to help with medical office co-pay, dental services and for prescription glasses. Due to government regulations the benefits package will include protection under the following laws: FMLA, FSLA, and Affordable health care act. The employee will be eligible for protection under the FMLA after working 1250 hours. In addition, being that this position is a non-exempt position the employee will be paid time and half for anything worked over 40 hours. The 40 hours must be labor work hours and cannot be used in conjunction with pay without work. The rewards package will include bonus for company meeting and exceeding profits and will be awarded semi-annual at the rate of 10% of the annual salary. The 10% will be granted if the company meets 100% of sales goal. If the company meets 95% of the forecasted sales then the employee will be granted 5% of the annual salary. In addition, to the bonus pay the company will provide merit pay increases based on annual employee performances. The most important aspect of this compensation package would be the rewards that will motivate the secretary. Due to this position being an individual contributor it can become a lonely position. Therefore, it is critical to ensure a reward package is in place to motivate the employee. One of the rewards would be to provide
Sally should consider the advantages and disadvantages of offering piece-rate plans and team-based plans. While both plans offer great advantages for the employees and the company, the disadvantages should be considered as well. Offering the piece-rate pay/individual incentive pay program can have serious limitations. These types of plans can potentially promote inflexibility. Workers can find themselves becoming dependent on their supervisors to set their work goals. Job performance may not increase beyond the compensation amount for those employees who are highly proficient performers, as they may not strive to work beyond what they will be rewarded (Martocchio, 2013). Supervisors are responsible for developing and maintaining performance
Reading passage describes that A.O.Smith Corporation produces car frames and they sell it to car manufacturing companies.So, they intended to increase their productivity to increase their productivity a new wage system is introduced called piecework wage system.In this system workers are paid according to their capability of number of pieces produced.If they produce more no of pieces they get more pay,if not they get less pay.Their intention is to increase in the productivity and expected workers morale and these outcomes are satisfied initially.
To motivate employees to work towards reaching organizational goals, managers frequently depend on some form of enticement. Beyond monetary compensation, awards and additional types of acknowledgment can be given, and the ability to choose a work schedule is a possibility. A reasonable pay system, which would be an incentive for individuals and groups to achieve organizational goals, is a hardship manager’s face (Jones & George, 2011). Within the company that I work for, every quarter awards are presented to Customer Service Agents who have maintained a 95 percent or above quality score. Monetary awards are given out as well as time off coupons.
An incentive pay program can reward employees who continue to produce superior work or encourage employees who already produce good work to best. Sometimes, use an incentive system when employees are lack of enthusiasm of getting down to work and improving things. If everyone in the same job classification gets the same pay, there is no real incentive to do an outstanding job (French, 1990). Various incentive plans used to motivate all employees such as production staff, sales staff, administrative staff and managerial and professional staff on an individual basis. To be improved employee work performance, the incentive pay programs need to be fairly matched with the employees’ expectation. Properly designed and maintained incentive pay program has the potential to increase employees’ productivity and work performance.