Company Payment Methods Analysis

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Questions and Answers

What is meant by 'fringe benefits' in the context of employee compensation?

Non-wage compensations provided to employees in addition to their regular salary (correct)
A government-mandated benefit for all workers in a company
Compensation based on employee performance and overtime
A fixed hourly rate set without consideration for skills or experience

What is the average hourly rate paid to employees at Company A?

$10 per hour
$12 per hour
$20 per hour
$15 per hour (correct)

How might the payment method used by Company B benefit its employees?

Employees enjoy flexibility in their job hours and additional perks (correct)
Employees receive bonuses based on company profits
Employees are less likely to leave due to guaranteed job security
Employees are compensated solely based on individual sales performance

Which financial method could Company A use to motivate employees aside from monetary compensation?

<p>Providing opportunities for skills training and development (A)</p> Signup and view all the answers

What assumption does Company B's management make about employee motivation?

<p>Enhanced productivity is solely driven by financial incentives (A)</p> Signup and view all the answers

Flashcards

Fringe Benefits

Additional benefits provided to employees beyond their regular salary or wages, such as health insurance, paid time off, retirement plans, and life insurance.

Hourly Rate

The payment received by employees on an hourly basis for their time and work.

Piece Rate

A method of payment where employees are paid based on their work output, typically for each unit of goods they produce or service they complete. This can be calculated as a fixed amount per unit or a percentage of the sale price of each unit.

Commission

A method of payment where employees are paid a base salary in addition to a percentage of the sales they generate. This incentivizes employees to sell more and earn higher commissions.

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Profit Sharing

A method of payment where employees are paid a base salary and a percentage of the company's profits. This incentivizes employees to work towards the success of the company as their earnings are directly linked to company performance.

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Study Notes

Exam-style Questions

Two companies, A and B, are compared regarding their payment methods.
Company A manufactures televisions, while Company B manufactures pottery.
Company A pays hourly, with average weekly wages of $200 and employees working 40 hours/week.