What's it: Profit-sharing is a bonus paid to employees based on the company's profit performance. It is an additional incentive beyond the salary they receive. When it exceeds the target, the company distributes a portion of the profit as a
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Performance-Based Pay: How it Works, Pros, Cons
What's it: Performance-based pay is a compensation scheme beyond salary adjusted for employee performance. If they reach or exceed the targets set by management, employees get bonuses. The company gives it after evaluating the employee's
Time-Based Wage: How it Works, Pros and Cons
What's it: Time-based wage is a remuneration system calculated based on the time contributed by workers. It is usually calculated based on hours worked. Thus, the total wage paid to each individual is equal to the total hours worked times the
Piece-rate Wage: How it Works, Advantages and Disadvantages
What's it: A piece-rate wage is a wage system in which workers are paid based on the output produced. This is an alternative to time-based wages, calculated based on hours worked. This pay system is suitable for businesses where their products
Fringe Benefits: Examples, Advantages, Disadvantages
What's it: Fringe benefits are compensation provided to employees beyond salary or wages. Common examples are insurance, retirement plans, family leave, and gym facilities. Some companies may also provide non-general or specific benefits such as
Share-Ownership Scheme: Its Importance, Pros, and Cons
What's it: A share-ownership scheme is an incentive to employees and management by giving them the right to purchase stock in the company they work for. It could be an employee stock ownership plan (ESOP) and a management stock ownership plan
Non-Financial Motivation: Why Is It Important? What are the Types?
What's it: Non-financial motivation is an employee's encouragement without involving direct monetary compensation such as salary. Rather, it involves factors related to the employee's job and self. Several methods are available, including job
McClelland’s Theory of Needs: Types and How to Satisfy
What's it: McClelland's theory of needs explains how the needs for achievement, affiliation, and power influence individual actions. These three needs underscore why a person is motivated. Some predominate on the need for affiliates to explain
Pink’s Theory of Motivation: Elements and A Brief Explanation
What's it: Pink's theory of motivation describes three vital elements for intrinsically motivating employees: autonomy, mastery, and purpose. Employees have a psychological need to support them to grow and develop. All three play an important
McGregor’s Theory X and Theory Y: Categories, Characteristics, and Implications
What's it: McGregor's Theory X and Theory Y describe two groups of employees. One is motivated by external incentives and requires supervision because they are less likely to take the initiative. Others need autonomy in their work to actualize
Financial Motivation: Why It Matters and Types
What's it: Financial motivation is an encouragement to employees to do something involving monetary compensation or the like. Companies have many variations to motivate employees. Salary or wages are the most common to encourage them to work
Self-appraisal: How it Works, Advantages, Disadvantages
What's it: Self-appraisal is an employee appraisal method by asking them to responsibly evaluate their own performance. For example, your company asks employees to fill out an evaluation form. Then, they submit it to their manager or supervisor