Product to be sold Technical products have high barriers to entry and need

Product to be sold technical products have high

This preview shows page 44 - 46 out of 52 pages.

Product to be sold Technical products have high barriers to entry and need training – high base-pay component Low barriers to entry – higher incentive component Products that sell themselves – base pay Products that require harder work – incentives o Sales jobs don’t fit with either straight salary or straight commission packages o Combination plans are often used Guaranteed straight salary can be linked to performance of nonsales functions Sales commissions for volume yields incentive to sell Guaranteed base salary Guaranteed base salary + commission Guaranteed base salary + bonus Guarantedd base salary + commission + bonus Commission only Contingent workers o Include a person who works: Through a temporary help agency On an on-call basis As independent contractor o Typical salary arrangements Workers in first two categories often earn less than workers in traditional arrangements Independent contractors often earn more o Identify was to deal with equity issues View workers as pool of candidates for more permanent hiring status Champion the idea of boundary-less careers Chapter 15 Impact on general wage and benefit levels—do unions get higher wages and by how much, are wage cuts more prevalent in unionized organizations
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- Unions make a difference in wages o Union workers earn between 8.9% and 12.4% more than nonunion workers - Size of gap varies from year to year o During periods of higher unemployment, impact of unions is larger o During strong economies, union-nonunion gap is smaller - Union-nonunion wage differentials in public sector o Union employees earn about 22% more than their nonunion counterparts Impact on the structure of wages—benefits, two-tier wage structures, worker vs. management wages - Impact on general wage and benefit levels o Presence of a union adds 30% to 40% to employee benefits o Greater percentage of total wage bill allocated to employee benefits Benefits are 37.9% of total compensation package for union workers Benefits are 27.8% for nonunion workers Higher costs due to Higher pension expenditures Higher insurance benefits - Impact on structure of wages o Two-tier pay structures are a phenomenon of union sector Contract differentiates pay based upon hire date Employees hired after a target date receive lower wages than their higher-seniority peers in similar job o From management’s view, wage tiers are a viable alternative pay strategy Cost control strategy to allow expansion or investment Cost-cutting device to allow economic survival o From a union’s view, wage tiers are seen as less painful than Wage freezes Staff cuts among existing employees o However, the tradeoff bargains away equivalent wage treatment for future employees o Evidence indicates gap between workers and their managers is 27% smaller in unionized firms o Managers in union firms receive higher wages than nonunion managers o
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  • Davison
  • Management, Organization Factors

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