In the present report, we will concentrate upon different approaches to calculating payment to the staff, with especial emphasis upon the use of performance-based and skill-based payment systems, and compensation packages.
Whereas there are several types of salary (fixed, performance-based, skill-based, etc.), each having its merits and demerits, the companies choose the one that corresponds ideally to the profession, style of work, and even personal traits of workers. It is a well-known phenomenon that whereas some categories of employees are motivated by high salaries, others prefer getting compensation package rather than big salary. For companies' managers, it is often difficult to choose between offering their employees high salary, on the one hand, and other benefits on the other. Let us therefore consider two types of payment and compensation packages, and how their use influences the performance of the employees.
Skill-based system of employees' remuneration certainly has both advantages and disadvantages: on the one hand, it makes the task of calculating the payment for each worker easier for the company's management and allows to attract and retain highly skilled personnel, but on the other hand it takes into account skills rather than actual performance and therefore people get more not ...Show more