Payment Systems

Question	Answer
Piece Rates	This involves workers being paid per item they produce. There is also a low basic flat rate with additional earnings made through piece rate. This method of payment tends to be used in factories. The more a worker produces, the higher the rate of pay. It can act as an incentive to employees to work hard, Close supervision of output is required to ensure that workers do not sacrifice quality for quantity. Employees may be penalised if quality is not maintained.
Flat rate.	Some employees are paid a set salary per annum. This salary is then divided into twelve equal monthly payments. Managers, supervisors and office staff tend to be paid by this method. It does not reward staff for an increased high level of effort but allows them a guaranteed monthly income.
Time Rate.	Many workers are paid per hour worked (e.g. £6.%). Staff in service sector organisations and manual workers are often paid at times rates. This method is simple to calculate for the employer and rewards the employee for the time spent at work. It does not provide any added incentive to produce quality work.

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	Created by beth.watson7 over 11 years ago