payment system
Describe a payment system in details and discuss why you believe it to be the most appropriate in terms of staff motivation
A payment system is a method by which the salary or wages of an employee is calculated, it involves balancing the organization interests with those of its employees.
The payment system is the infrastructure (consisting of institutions, instruments, rules, procedures, standards, and technical means) established to effect the transfer of monetary value between parties discharging mutual obligations.
Types of payment system:
They could use Commission: Workers are paid a percentage of the products’ sales value this would be suitable as it would motivate staff to sell more as they rely on commission to earn money.
They could use a bonus scheme: Workers must achieve pre-agreed sales targets to earn the bonus. This would encourage staff to sell more which would increase the company’s turnover and profits.
They could offer sales staff a salary: This would provide staff with financial security. However, it may not motivate staff to sell more are the same amount is pay each month regardless of performance.
Performance related system: where pay is linked to performance, with higher level of performance leading to increased pay.
Time or flat rate system: in which pay is expected as an hourly, weekly or annual rate.
How it motivate staff?
• People feel strongly about it. Pay helps to satisfy many needs (e.g. security, esteem needs, resources to pursue self-actualization)
• Pay is the subject of much important business legislation
• It helps attract reliable employees with the skills the business needs for success
• Pay also helps retain employees – rather than them leave and perhaps join a competitor
• For most employees, the remuneration package is the most important part of a job – and certainly the most visible part of any job offer.
Effectiveness
Money can be used to motivate employees across a broad spectrum of industries. In
A payment system is a method by which the salary or wages of an employee is calculated, it involves balancing the organization interests with those of its employees.
The payment system is the infrastructure (consisting of institutions, instruments, rules, procedures, standards, and technical means) established to effect the transfer of monetary value between parties discharging mutual obligations.
Types of payment system:
They could use Commission: Workers are paid a percentage of the products’ sales value this would be suitable as it would motivate staff to sell more as they rely on commission to earn money.
They could use a bonus scheme: Workers must achieve pre-agreed sales targets to earn the bonus. This would encourage staff to sell more which would increase the company’s turnover and profits.
They could offer sales staff a salary: This would provide staff with financial security. However, it may not motivate staff to sell more are the same amount is pay each month regardless of performance.
Performance related system: where pay is linked to performance, with higher level of performance leading to increased pay.
Time or flat rate system: in which pay is expected as an hourly, weekly or annual rate.
How it motivate staff?
• People feel strongly about it. Pay helps to satisfy many needs (e.g. security, esteem needs, resources to pursue self-actualization)
• Pay is the subject of much important business legislation
• It helps attract reliable employees with the skills the business needs for success
• Pay also helps retain employees – rather than them leave and perhaps join a competitor
• For most employees, the remuneration package is the most important part of a job – and certainly the most visible part of any job offer.
Effectiveness
Money can be used to motivate employees across a broad spectrum of industries. In