A. Briefly explain: Compare and contrast piecework v. standard hour plan. Why wo

Question

A. Briefly explain: Compare and contrast piecework v. standard hour plan. Why would an employer choose to use the piecework plan over the standard hour plan? Give an example on how each is used.

B.Briefly explain: What is merit pay? Do you think it's a good idea to award employees with merit raises? Why or why not?

C. Summarize: What is an Employee Stock Ownership Plan? How did the company ENRON affect its employees with its unethical practices and their ESOP's? How was pay and compensation affected by the false profits and account reports? What negative consequences did this have on people (stakeholders and shareholders) who owned or were directly or indirectly connected to ENRON stock?

D. Define employee benefits. Make two lists and then explain: Which are required by state or federal laws? Which are (discretionary) benefits on the part of the employer? What is the difference between the two?

E. Summarize: Explain how company's like Costco use their compensation plan to improve employee engagement, productivity, and performance. What can Costco's pay practices teach us about how we design compensation plans?

Explanation / Answer

A) Piecework is a method where employee gets paid based on the number of units produced in a given period of time. The amount per unit is fixed and the payment will be done based on what has been produced. It is purely based on the productivity.

Standard hour plan is a method in which employee gets paid based on the number of hours required to produce a unit.

It is very obvious that employer will choose piecework instead of standard hour plan. The incentive for an employee gets calculated based on the number of units the person has produced. The incentive cannot be calculated based on the time it was taken to produce a unit. When you know the time it takes to produce the unit, it becomes easy for an employer to calculate the incentive based on number of units produced and pay them. Also piecework is beneficial for the employer as well. Piecework is used when an organization is focussed more towards the productivity. The more you produce the more incentive you get. You can take an example of hair stylist. If you know how much get paid for each person a hair style is done, based on the number of people the incentive will be paid. In standard hour plan employee receives wages based on number of hours required to finish the task than actual time. The best example for this is Cab vendors. The drivers gets paid once he take the passenger to the destination irrespective of time.

B) Merit pay is pay for performance. It is an approach to compensate the higher performing individuals with additional pay. It is a good idea to award the employees this way. Always the monetary incentive to the employees motivates them and makes them produce more than what they are doing. It does not only acts as rewarding the employees but also recognizes the employee performance and boost employee morale. It also motivates the other employees to strive towards winning the Merit pay.

C) Employee Stock Ownership Plan is a plan designed for stock purchase plan for an employee. It also motivates employees or workers to have ownership interest in the company. Top officials at ENRON misused their powers and manipulated most of the information and there

D) Employee Benefit is something which is apart from salary and the benefits which are provided to the employees in the organization. This is done to provide the competitive package to the employees and be competitive in the market. There are many employee benefits which are required by law. One of them is COBRA Benefits. All the employees are required to maintain insurance coverage for the period up to 18 months. This is applicable to all former employees, spouses and their children. One of the benefit which are beneficial to the employer is work from home facility. Here the employer gains a lot. When the employee does not turn up to the office it will save a lot of cost to the employer in terms providing facilities to the employees.There are certain benefits which are beneficial to the government which means through providing benefits to the employees indirectly it helps the state government and benefits to employers is the Employers gets benefited by providing the benefit to employees. These are two way benefit which are provided.

E)

Costco is a very famous company in United States and Costco is famous for providing the best compensation to its employees and the design is very much appreciated by everyone. Costco believes that providing better employee benefits will enhance the employee’s productivity, efficiency and performance. Apart from compensation, Costco provides other benefits like

Great Medical benefits

Stock purchase plan and money management information

Disability Insurance

One of the best incentive in Costco is the hourly compensation is much beneficial and the employees get paid really well. Since the concept is hourly wages it is very beneficial for the employees. Costco package teach us on how to treat the employees and make them happy along with enhance the productivity

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