Employee Compensation
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INFORMATION ON RESULT-BASED PAY SYSTEM.
HOW MUCH ACCURACY IS IN WAGE SURVEYS?
HOW IS COST OF LIVING RAISES DETERMINE?
MERIT RAISES THAT RANGE FROM 0-12% DEPENDING ON JOB PERFORMANCE.
IS THIS A HIGH RANGE?
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Solution Summary
The solution addresses INFORMATION ON RESULT-BASED PAY SYSTEM.
HOW MUCH ACCURACY IS IN WAGE SURVEYS?
HOW IS COST OF LIVING RAISES DETERMINE?
MERIT RAISES THAT RANGE FROM 0-12% DEPENDING ON JOB PERFORMANCE.
IS THIS A HIGH RANGE?
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Result based compensation systems are typically consider economically efficient when the business context makes the possibility viable. The reason for this is that it places the worker's incentives in line with that of the company's. For instance, if you receive an hourly wage and you don't like working then your individually efficient decision would be to put forth as little effort as will allow you to keep your job (whereas the company would want you to work as hard as possible). On the other hand, consider the result-based system - your goal is to make as much money during your work hours as possible, so your incentive is to work as productively as you can.
There has been, however, one major problem observed in the research. In some applications, a famous one involving a furniture company in Michigan, the employees did not exhibit a desire to earn more than they were making before the ...
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