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Explain the different types of financial and non-financial rewards for employees in a business. - Leaving Cert Business - Question B - 2013
Question B
Explain the different types of financial and non-financial rewards for employees in a business.
Worked Solution & Example Answer:Explain the different types of financial and non-financial rewards for employees in a business. - Leaving Cert Business - Question B - 2013
Step 1
Financial Rewards
Answer
Time Rate
Employees are paid a fixed amount per hour for a specified number of hours per week, ensuring regular compensation. If employees work overtime, they are compensated at a higher rate, which can be a time-and-a-half or double time.
Piece Rate
This method rewards employees based on the number of units they produce or jobs they complete. The more units produced, the higher the earnings for the employee.
Bonus
A bonus is an additional sum awarded to employees for achieving specific targets, like reaching production goals within an agreed timeline.
Commission
Commission is earned based on the value of sales generated by an employee, commonly seen in sales roles where a percentage (e.g., 10%) is paid for every sale made. This motivates employees to increase their sales performance.
Profit-sharing schemes
In profit-sharing schemes, a share of the organization's profits is distributed among employees based on pre-agreed criteria. This not only motivates employees to perform better but aligns their interests with the company's success.
Employee Share Ownership Scheme
These schemes give employees an option to purchase shares in the company, creating vested interest in its long-term performance and stability. Employees may be encouraged to enhance the company's performance to see a tangible increase in their share value.
Step 2
Non-Financial Rewards
Answer
Benefit-in-Kind
These rewards involve non-monetary benefits such as goods or services provided to employees, enhancing their position's status and boosting morale. Examples include company cars, meal vouchers, and health insurance.
Promotion
Promotion involves elevating an employee to a more senior role within the organization. This not only provides a sense of recognition but often comes with increased responsibilities and opportunities for personal growth.
Job Satisfaction/Job Enrichment
This type of reward focuses on enhancing the job itself by making it more satisfying through social interaction and teamwork opportunities. When employees experience greater job satisfaction and feel their work is meaningful, they are likely to be more productive.
Flexitime
Flexitime allows employees to dictate their own working hours within an agreed framework, giving them the freedom to manage their work-life balance more effectively.
Job Sharing
This arrangement allows two employees to share a single job role. It provides flexibility for individuals who may need part-time opportunities while ensuring the role is adequately covered.