Page 142 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes Pension Plans
Companies also provide supplementary income or pension to its employees after their
retirement. These pension plans can be company paid or both company and employee paid.
In addition to the pensions, companies also provide bonus to the employees reaching
superannuation.
6.2.9 Concept of Variable Compensation
Variable compensation refers to the incentive schemes that are given to the workers on the
basis of their productivity. These schemes may use bonuses or variety of rates as incentives
to compensate for the superior performances of workers. These schemes are popular all over
the world and are used extensively for raising productivity.
Incentives schemes are several and varied. They are broadly classified under two heads:
• Individual incentive schemes
• Group incentive schemes

Figure 6.2: Variable Compensation

Incentive Schemes
(Individual Incentive Schemes and Group Incentives Schemes)

Earnings Earnings vary Earnings vary Earnings
vary in the less proportionately differ at
same proportionately more than the different
proportion than output output levels of
as output output
Taylor's
Straight Piece Halsey Plan High Piece Rate Differential
Work Method Method Piece Rate
Rowan Plan Method

Standard Hour Barth Scheme High Standard Marrick
Method Bedaux Plan Hour Method Differential
Piece Rate
Method

Gantt Task
Method
Emarson's
Efficiency
Method

With the help of diagram show the incentive schemes for different
organizations.

Self Assessment
Multiple choice questions:

1. Any job rating plan must be …..….. to foremen and employees.
(a) collected (b) sold
(c) delivered (d) none of these

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