Individuals employed in many branches of the marketing or selling function of an industry are frequently paid a fixed salary (time work) plus commission on sales (piece work). The commission is usually expressed as a percentage of the value of sales over a period. It may be payable on total sales at a relatively low percentage, or only on sales exceeding agreed target figures, in which case it would be at a higher rate.

In some occupations, notably that of insurance salesmen, there is often no salary at all, all remuneration being by way of commission.

Conditions of work

A form of incentive more widely adopted today than in former years is that of profit sharing. This is the sharing of a predetermined portion of the annual company profits with each member of the work force, usually in proportion to his or her wage or salary. This is too indirect for it to be an important productivity incentive since the size of the company profits is quite outside the control of any individual employee.

The main purpose of profit sharing is to bring a feeling of belonging, of participation in the activity of the company, to each employee. Nevertheless, it may still form part of total remuneration and is not a feature to neglect in assessing the total reward to be derived from any given employment.

The earning of wages, salaries, bonuses, commission and profit sharing ? the sum of the cash remuneration - is not the only purpose most of us have in taking employment. Indeed, we might actually enjoy the work we do for its own sake! Unless we have been brought up to a life of complete leisure, most of us obtain a greater or lesser degree of personal satisfation and fulfilment from earning our living. We have only to notice that we are much less bored when we are in work than when we are unemployed for this to be seen to be true. We enjoy the routine of the working week, weekends and holidays. We enjoy the company of our workmates. We may also enjoy the comfort of pleasant working conditions. All these features, present or lacking, are part of the 'package deal' when taking employment.

Training and promotion

The existence of company-sponsored facilities for training and acquiring new skills, the prospects of regrading (as to both skill and seniority) and the prospects of promotion are all relevant factors in helping us to decide what job to accept.

Piece Rates Example

Standard output of average operator is 15 units per hour. For a standard week of 39 hours the guaranteed basic wage is £70.20. This factory operates a so-called 'time allowed' rate system of bonuses. This means that it pays piece rates calculated at the time allowed for the standard output for any excess of output produced by an operator.

A given operator produces 825 units in a particular week. What will be his gross pay?

Answer 15 units per hour for 39 hours = 585 units, which is therefore the

standard weekly output per man.

Standard weekly wage is £70.20.Piece Rates Example

Personal And Business Finance 2018

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