What's it: A salary is a regular lump sum payment usually paid to employees every month. Companies do not pay it based on the hours worked or the output produced. Instead, they regularly pay every month and at a fixed nominal according to the
Financial Motivation
Wages in the Labor Market: Types and Differences from Salary
What's it: Wages are irregular payments to workers. Companies may pay them based on the hours worked or their output. It may be paid daily, weekly, monthly, or when the project has been completed. Unlike salary, workers at the same level may
Commission-Based Pay: How it Works, Pros, Cons
What's it: Commission-based pay is money paid to employees based on the value involved, expressed as a percentage. How to pay commissions can vary between jobs and companies. For example, companies pay commissions to salespeople based on their
Profit-Sharing as a Motivator: How it Works, Advantages, Disadvantages
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
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
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
Bonus: Types, Advantages, Disadvantages
What's it: A bonus is compensation beyond the regular salary paid by the company to employees or management, usually once a year. In a narrow definition, it refers only to cash payments. However, a broad definition may include share ownership