The structure of payment can vary drastically among individuals belonging to different sectors or industries of the market
1. The structure of payment can vary drastically among individuals belonging to different sectors or industries of the market. The main difference usually attributed to the degree of base pay versus incentive pay. Both forms of pay structures are beneficial to both employers and employees, given the right circumstances.
Manufacturing Company Accountant:
This job would most certainly emphasize base pay in the form of yearly negotiated salaries. This is one of the most stable, consistent jobs in the work force. There is no need for speed in this style of work. The accountants don’t actually generate profit, so paying them off incentives would only increase the liability for error. They are still valuable assets to the company as they provide an integral part of each and every business. Due to this importance it is wise to reward these individuals with a bonus here or there when the company is basking in success.
Software Company Salesperson:
Salespeople are the prime example of when you would want to implement an incentive base pay structure. Because of the profit generation potential of this position, it is advantageous to compensate those that are the top performers. The most logical based way of looking at this is through raw numbers. You sell the most product/service, then you make the most money. Another reason for this incentive-based structure is that Employers are able to see for themselves if new hires are productive before they are committed to the salesperson for the future without risking much financially. Base pay is often offered in small amounts to go along with incentive-based structures. Some salespeople are however, solely compensated through incentives.
A Chief financial officer is a position that will have the most combination of base pay and incentive pay. Because of the skills and experience required to perform this role, a large base pay is in order. CEOs are inevitably entwined to the success or failures that occur during their tenure. Compensating them with incentives like bonuses will no doubt lead to increases in production.
A Health Clinic Physician:
Surprisingly the answer regarding how to structure physicians pay is, both base pay and incentive pay. This career is akin to the CEO position in many ways. The skills and experience required to perform these work tasks are extremely specialized and require years of schooling and accreditations. This means that the positions demand a large salary base pay. However, the question prompt was not “Physician”, it was “A Physician in a health clinic”. This is important because unlike other physicians that are surgeons and more specialized, health clinic physicians are more abundant in the work force. Simply put, there are more health clinics, than specialized clinics in each field of specialization. This means that there is need for incentives to attract and keep talented employees. The success of the physicians is not as quantifiable as a CEO or salesperson, but it is still quantifiable nonetheless. Careers that can be quantified and generate profits for the business need to be compensated with bonuses and incentives in order to maintain steady production.
2.An accountant at a manufacturing company: For an accountant at a basic manufacturing company, the pay should emphasize wages and salaries. As most of the work is generally fixed, and a manufacturing company is not entirely suited for exponential growth, as to grow it must establish new facilities and achieve economies of scale, which is slower than what it would be at a tech company.
A salesperson for a software company: For a salesman at a software company, pay should certainly emphasize incentives such as profit sharing, and bonuses, as most salesmen anywhere are paid greatly in commissions, at a software company with a lot of growth potential profit-sharing would also be a great incentive. In some cases, software companies can be acquired for millions of dollars by big players, and a salesman could participate in profit-sharing or stock options in order to be incentivized to give his best at a company with that potential.
A chief executive officer: Similar to the salesman, the CEO is also better satisfied with incentive pay. This is because some CEOs like Mark Zuckerberg at Facebook Inc. have a $1 USD per year base salary, but makes millions to billions of dollars per year on stock options, dividends, and bonuses. Which makes base salary pay irrelevant to CEOs in most big companies, and incentive pay is always the way to go.
A physician in health clinic: A physician may be paid a wage and salary that is fixed at a good health clinic, the salary for physicians is generally competitive and well remunerated, hence, the need for a good stable paying job at a health clinic is ideal, so the focus should be on fixed pay in a good competitive salary and wage.
Original post that they wrote on:
With some organizations and jobs, pay is primarily wages or salaries and with others, incentive pay is more important. For each of the following jobs, state whether you think the pay should emphasize base pay (wages and salaries) or incentive pay (bonuses, profit sharing, and so on). Give a reason for each: An accountant at a manufacturing company; A salesperson for a software company; A chief executive officer; A physician in a health clinic.
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