The reward for work

1. GCSE ECONOMICS: UNIT 11 The reward for work Part One

2. Aims of today’s lesson … • Identify how people are paid and rewarded for working • Analyse the rewards for work in context

3. How people are paid • People are paid for the labour they supply • Generally people are paid more the longer they work, however there are a number of different ways that people are paid for their labour

4. How people are paid: Salary • Salaries are stated as yearly earnings • The salary is then divided by 12 and this amount is paid monthly • For example an employee on a salary of £36,000 will be paid £3000 a month • Salaries tend to be paid to full time workers although it is not uncommon for part-time employees to be paid a salary • Jobs which pay salaries tend to be skilled and non-manual in their nature e.g. teachers, nurses and doctors

5. How people are paid: Wage • Wages are calculated as an hourly rate and multiplied by the number of hours worked • Wages tend to be paid weekly • Wages tend to be paid for lower-skilled jobs, part-time or temporary work

6. How people are paid: Commission • Employees who are paid commission receive payments for meeting certain targets • These targets are often linked to sales e.g. selling 10 cars in a month may mean a car salesman receives 10% commission • An employee who adds to a company’s sales will often receive a percentage of the sales value as reward e.g. 10% of the value of the 10 cars they sold • Commission acts as an incentive to employees to achieve more sales • Employees can be paid partly or fully on commission

7. How people are paid: Overtime payment • Businesses sometimes require employees to work longer hours • This is usually the case when production of a product needs to be higher than usual • Rather than hiring more workers, a company will encourage its workforce to work longer hours • In order to give up their leisure time employees are paid at a higher wage rate for these extra hours • These extra payments are known as overtime payments

8. How people are paid: Shift work payment • Some workers will not work the traditional ‘9 until 5’ but rather work shifts • This often occurs when a business needs to be kept open for longer than the normal working day • As a result of working unsociable hours employees can be compensated through higher wages

9. How people are paid: BACS • BACS stands for the Bankers’ Automated Clearing Services and is a system used within the UK for allowing the electronic transfer of money between banks • This means that it avoids the need for paper-based documents when making payments • The payments can take up to three days to move from one bank to another

10. How people are paid: Fringe Benefits • Fringe benefits are when workers are Paid in ways other than money • Examples include; • Company car • Private healthcare • Staff discounts • Employer Pension contributions • Fringe benefits have a financial value and are often paid for highly skilled and highly paid jobs

11. Extension Task... • Complete the case study by accessing the document called... “2.2 The reward for work”