Question

Identify alternative pay methods and choose the advantages and disadvantages of each.

Answer 1

PaymentMethods	Advantages	Disadvantages
Merit Pay	Increases employees base pay	Even though it increases employees’ base pay, it may not increases work productivity.
Incentives andBonuses	Is directly in correlation with employees work performance. Meaning better work productivity from employees,	Causes unwanted and unnecessary competition amongst co-workers.
Commission	It combines pays base pay and a percentage of the employees’ sales. Also encourages employees to sale and produce more.	Employees tend to be dishonest about productivity, and is more geared towards a single employee’s effort, not the groups.
On the SpotAwards	Immediate recognition for outstanding work. Will boost employees’ morale and instill the ambition to be recognized by superiors and peers.	Causes employees to become disgruntle towards management and other peers due possible favoritism towards certain employees
Gainsharing	Increases equality amongst employees, productivity of the company, and lowers cost	Hard to establish a baseline for productivity, even though all employees are paid equally it may still be unfair to some employees.
Profit Sharing	Payment are well above the employees’base pay, and the company has made aprofit for the fiscal year.	Not always guaranteed, and at thecompany’s discretion