Unit 5 Flashcards
(22 cards)
Piece rate
Pay system where employees get paid a specific amount of money for each unit produced or processed
Straight piece rate
Same amount is paid for each piece produced or processed, regardless of how many are produced
Differential piece rate
A lower amount per piece is paid if production does not meet the production standard, and a higher amount when the production standard is met
Sales commissions
Pay based on sales/transaction volume
Maintenance selling
Selling established products to existing customers
Conversion selling
Selling established products to new customers
Leverage selling
Selling new products to existing customers
New market selling
Selling new products to new customers
Merit pay
An increase to an employee’s base pay in recognition of good job performance
Merit bonus
Cash payment to recognize good employee performance, but does not increase base pay
Special purpose incentive
Incentive designed to motivate a specific type of employee behaviour
Suggestion system
Incentive plan where employees receive cash bonuses for submitting money-saving suggestions
Gain-sharing plan
Group performance pay plan that shares cost saving or productivity gains with members of the group
Goal-sharing plan
Group performance pay plan where the group receives a bonus when prespecified performance goals are met
Competitive bonus plan
Group pay plan that rewards work groups for outperforming other work groups
Pooled performance pay
Pay plan where the group performance results are pooled and group members share equally in the performance bonus
Group commissions
Performance pay where commissions are pooled and shared equally by group members
Group piece rates
Performance pay where group members get paid based on number of completed products produced by the group
Employee profit-sharing plan
Bonus payments based on company profitability
Current distribution profit-sharing plan
Distributes profit-sharing bonus’s in the form of cash or shares, at least annually
Deferred profit-sharing
Profit-sharing bonuses are allocated to employee accounts but not paid out until later, usually on termination or retirement
Combination profit-sharing plan
Combination of paying some of the profit-sharing bonus on a current (cash) basis and deferring the remainder
