1. Time-rate method 2. Piece-rate method 4. Profit-sharing Advantages Disadvantages 2. Piece-rate method Advantages Disadvantages 4. Profit-sharing Advantages Disadvantages 3. Other payment methods

P.158 1. Time-rate method By the time-rate計時method, workers are paid according to how much time they have worked按工作時間的長短. They may be paid by the hour, day, week or month.

Time-rate method 1. To the employer, it is very easy and simple to administer. Advantages Worker does not have to work hastily. 2. The employees can have a stable income.

Time-rate method 1. The workers should be supervised closely to prevent laziness. There is an additional cost of monitoring input in this case. Disadvantages

Time-rate method It is unfair to hardworking and productive workers. Disadvantages The workers have lower incentive to work since there is no reward for doing more.

P.159 2. Piece-rate method By the piece-rate計件method, payments are made according to the amount生產量of goods workers have produced.

Piece-rate計件method 1. There is usually greater incentive to work. 1. It can save monitoring or supervision costs. If the worker is lazy, his income will be lower. Advantages 2. This method of payment is fair to the more hard-working ones.

Piece-rate method 1. Workers may hurry to produce more, which may result in poor-quality work. Disadvantages 1. Cost of monitoring output quality of the worker is needed. 2. = P.159 Table 8.4

P.159 3. Other payment methods It is usual to find combinations of different payment methods. In addition, other methods such as bonuses, commissions, fringe benefits (e.g. health insurance) and gratuities/tips are also found in wage payments.

P.159 3. Other payment methods For instance, the amount of commission is based on the ability of sales people to close deals (such as real estate agents, insurance agents). If the employees do more business, they can earn more commission.

P.159 3. Other payment methods Commission is suitable for work where the quality and quantity is difficult to monitor (e.g. the employees do their jobs on their own with no direct supervision).

P.159 3. Other payment methods It can increase the incentive to work and increase the sales volume of the firm. If the employees do not perform well, their commissions are low, too. Thus, their income is unstable.

P.160 4. Share-rate/Profit-sharing分享利潤制 By the share-rate method, workers are allowed to share the profit利潤earned by the firm. basic salary revenue share

Share-rate method It promotes a sense of belonging to the firm. This system gives the employees a greater incentive to work since their income depends partly on the firm's profit. Advantages

Share-rate method It can reduce the cost of supervising the workers and monitoring their work. Advantages The firm can share the risk of operation with its employees.

Share-rate method This system means greater risks will have to be borne by the employees. Disadvantages It has higher measurement costs than that of the time-rate method.

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