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Methods of Remuneration (How we reward staff). What you will learn: Time rate Piece rate Commission Bonus Full-time versus part-time work Permanent/Freelance/temporary.

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Presentation on theme: "Methods of Remuneration (How we reward staff). What you will learn: Time rate Piece rate Commission Bonus Full-time versus part-time work Permanent/Freelance/temporary."— Presentation transcript:

1 Methods of Remuneration (How we reward staff)

2 What you will learn: Time rate Piece rate Commission Bonus Full-time versus part-time work Permanent/Freelance/temporary work Fringe benefits

3 Remuneration: How Employees are Rewarded at Work Decisions: Full time or Part time? Permanent contract or Temporary contract Pay Piece Rate or Time Rate Offer Bonus or Commission Fringe Benefits

4 Full-Time and Part-Time Contracts Full-time: More than 15 hours a week Part-time: Less than 15 hours a week

5 Permanent and Temporary Contracts Permanent Contract: No end date to the contract Temporary Contract: A finish date is stated on the contract. eg 6 months

6 Time Rate and Piece Rate Time Rate: Employees are paid for each hour they work. eg £5 per hour Piece Rate: Employees are paid based on how many products they produce. eg £3 for every product produced

7 Commission and Bonus Commission: Employee receives a reward for every sale made. eg 5% of every sale or £2 for every sale Bonus: Employee receives a set amount in recognition of their hard work. eg a bonus of £60 at Xmas.

8 Fringe Benefits Other benefits provided by the firm: Company carStaff uniform Subsidised mealsStaff discounts Health insurancePension scheme Child care facilitiesStaff parties Gym membership

9 Full-Time and Part-Time Contracts Full-time: More than 15 hours a week Part-time: Less than 15 hours a week

10 Full-Time and Part-Time Contracts Advantages and Disadvantages for the business Advantages and Disadvantages for the employee Full Time staff more committed may need worker for all those hours May be costly paid more than part time may not want to work long hours Part Time only employ the person for the hours you need (reduces wage costs) employee may not be as motivated wage will be lower than a full time post more flexibility as to the hours you work

11 Permanent and Temporary Contracts Permanent Contract: No end date to the contract Temporary Contract: A finish date is stated on the contract

12 Permanent and Temporary Contracts Advantages and Disadvantages for the business Advantages and Disadvantages for the employee Permanent Contract reduces need to keep re-employing staff may appoint someone who is poor Job security. Entitled to redundancy pay if made redundant Less flexibility Temporary Contract Gives business more flexibility, reduces redundancy costs Employees less motivated More flexibility No long term job security – less likely to get a mortgage

13 Commission and Bonus Commission: Employee receives a reward for every sale made. eg 5% of every sale or £2 for every sale Bonus: Employee receives a set amount in recognition of their hard work.

14 Commission and Bonus Advantages and Disadvantages for the business Advantages and Disadvantages for the employee Commission Staff more motivated Encourages more sales Increases business costs Increases wage each week De-motivated if don’t sell any products Bonus Encourages workers to work harder Increases business costs Reward for hard work De-motivated if don’t receive bonus

15 Exam Question Cheryl has just opened a bakery in Brighouse. She has two temporary staff – one manager and one baker. She is considering changing her methods of remuneration. 1.Using the information provided, explain the difference between time rate and piece rate. 4 marks 2.Cheryl is thinking of offering permanent contracts to her staff. Analyse whether or not this is a good idea. 8 marks

16 Why offer a permanent contract? Effect on motivation Effect on quality of work Effect on labour turnover Effect on sales and profit Effect on costs Effect on redundancy payments if she needed to reduce her workforce


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