Chpt.6

• What’s time rate?

  Time rate is the amount paid to an employee for one hour of work.
• Wages Advantages

  1. worker get paid on regular basis and does not have to wait long for some money.
  2. If employees works longer than normal hours, they can usually be paid overtime. This is an incentive to work additional hours when required by the business.
• Who does wages tend to be paid to

  manual workers (warehouse or factory workers)
• Methods of motivation - financial rewards, Wages disadvantage

  1.As the wages are paid weekly, they have to be calculated every week, which takes time and monev. (Wages clerks employed to perform this task)

  When calculating the wages to be paid, they can be worked out in a number of different ways; time rate or piece rate.
• What are Wages?

  Is a payment for work, usually paid weekly
• Wages- Time rate A&D

  1. (A) This makes it easy to calculate the workers wages and the worker knows exactly how much they wil be paid for working a certain period of time.
  2. (D)Hours worked are often recorded on time-sheet, used to calculate the wages by the Accounts department. The system takes time.
  3. Good and bad workers get paid same.
  4. Often supervisors are needed to make sure workers keep working and producing good quality products (expensive because more supervisors are needed by the business).
  5. Clocking-in system is needed to determine the number of hours worked by the employees.
• Wages- Piece rate A&D 1. (A) The advantage with this system is that it encourages workers to work faster and produce more goods. 2. (D) Workers may concentrate on making large number of products instead of quality, causing poor quality goods to may not sell very well/bad reputation. Needing to requipre quality control system=expensive.
• What’s Piece rate?

  Piece rate is an amount paid for each unit of output.
• What’s a salary?

  A salary is payment for work, usually paid monthly.
• Commission- AdvantagesA&D (A)Commission schemes give sales staff extra incentive to sell more products/services. They also allow businesses to reward hardworking staff without having to spend money on bonuses. (D)if sale staff are very persuasive/encourage people to buy goods they don’t really want- sales increase but only for short-term and get a bad reputation. Stressful for sale staff if they have a bad month, their pay will fall. May be too much competition between sales staff
• Wages- piece rates Disadvantages

  1. ppl who are careful in their work instead of rush will not earn as much -› may not be seen as fair. Cause Friction between employees.
  2. If the machinery breaks down will cause employees to earn less. Because of this, workers are often paid a guaranteed minimum amount of money.
• Economic problem

  Unlimited wants + limited resources = Economic problems
• Supply increase

  Prices increase
• Need


  A good or service essential for living (food, shelter, water)
• Want


  A good or service which people would like to have but is not essential for living (new shoes, new watch)