Fringe Benefits
Rewards received by employees in addition to their wages or salary
Often classified as “perks” of the job
Examples:
- Company car
- Lunch
- Private health care
- Pensions
Performance Related Pay (PRP)
Some of an employees pay is linked to the achievement of targets at work
Targets may be sales targets or performance appraisal
Criticisms of PRP
Many employees see this as unfair as can be based on an appraisal interview
Lots of businesses don’t put sufficient money aside so employees only get a small bonus
Developments in PRP
Increasingly firms are using a system called Variable pay
This a flexible type of PRP which offers employees a highly individual pay system related to their performance
Higher rewards for star performers
Piecework
Employees paid due to quantity produced
Now with minimum wage legislation employers need to ensure piece workers hit the threshold.
Proft Sharing
Employees receive part of the business profits
Profits can be paid in cash / shares
This helps motivate the workers to earn the company profit as they see the financial incentive for themselves – this can raise efficiency and productivity in the organisation
Salaries & Wages
Salaries – annual and paid monthly
If you get a salary work a set number of hours as set out in contract
Wages – paid weekly
Have to be at work for a set time, paid overtime for any extra hours
Salaries and wages are often seen as the key motivator for an individual to work
Share Ownership
These can be either:
- Allowing employees opportunity to purchase shares after saving for a period of time
- Share options – mangers have the opportunity to buy company shares on an agreed date in future at current rate
Having share options increases the feeling of ownership for an employee acting as an incentive for them to work harder.
