Show Me the Money! Re-numeration and Pay Incentive Packages for Employees

Types of Employment Relationships Employee Paid a wage in exchange for work, regular schedule, pay is taxed Full time (35-40 hours a week, usually 5 days a week) Part time Independent contractor Own your own tools, may work for a number of companies Paid a gross rate without taxes taken off (individual must submit full taxes at tax time) e.g consultants, construction

Types of Employment Relationships Piece worker Paid a specific rate of pay to complete a task e.g. paper route

Types of Pay Base Salary An amount of pay that does not vary week to week Reviewed periodically (usually annually) Sales Incentive An amount of pay that is based on how much you sell Sales targets are provided by management e.g. $100 per widget

Types of Pay Sales Incentive Some companies pay an employee a base salary (lower) plus a sales incentive This is usually companies that want employees not to be 100% focused on selling, but also customer service Some companies pay only 100% sales incentive, sometimes called “hunter” roles because they “eat what they kill” e.g. real estate agents

Types of Incentives Short Term Incentives Based on objectives set at the beginning of the year, paid at the end if objectives are achieved Most large employers have a broad based incentive plan for their employees Bonus An amount paid at the end of the year based on how the leadership would like to recognize individuals Mid term incentives Incentive plans with goals set for 2-3 years Paid at the end of the 3 years

Types Incentives Long Term Incentives Are usually rewarded to top management for one of two reasons. To keep them in place while the company is in transition  going bankrupt or being sold.  Is used to keep these people from jumping ship and looking for work. To keep individuals concerned about the state of the company.  Tie in cash incentive to the price of stocks  Completion of projects Perquisites Can be in just about any form of non monetary reward. Extra vacation, free trips, club membership, company car, company credit card etc

Employment Laws & Rules Two groups Federally regulated i.e. Financial Institutions like banks Provincially regulated i.e. Construction trades, some professions / occupations like educators Employment standards acts vary by province, defines hours of work, breaks, overtime pay, severance obligations

Categories of Employees Executives Leaders of an organization Generally have individually salary packages that may include a “golden parachute” (a defined amount of $ in the case that they are terminated without cause)

Categories of Employees Managers Defined in the Canada Labour Code People who have authority to hire and fire Exempt from receiving overtime Professional/ Salaried Do not manage others, overtime paid

Categories of Employees Union Employees whose terms and conditions are determined by a collective agreement (pay, benefits, hours of work, severance obligations) Pay increases are determined in advance at specific intervals, usually without performance being taken into account All employees receive the same amount Temporary workers Hired for a specific period of time, that must be less than 12 months (otherwise severance owed when employment is terminated)