Wages and Salaries
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Salaries & Wages
Salaries and wages are often seen as the key motivator for an individual to work
  • 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
Fringe Benefits

Rewards received by employees in addition to their wages or salary. Often classified as “perks” of the job


  • Company car
  • Lunch
  • Private health care
  • Pensions

These can increase employee loyalty

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
  • 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
Share Ownership

Having share options increases the feeling of ownership for an employee acting as an incentive for them to work harder.

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
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