Page 659 - Business Principles and Management

Unit 7

wages. For example, a comparison of average wage rates of several countries
shows that for every dollar U.S. workers earn on average, a worker in Korea
earns $.50, a Hungarian worker earns $.25, and a Mexican worker earns $.11.
There are also differences in the productivity of and training costs for workers
from various countries. Some companies that moved operations to other coun-
tries expecting great savings in labor costs have found that other costs are higher
than expected.

CHECKPOINT
List several factors that should be considered by a company
when establishing a compensation plan.

24.1 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Determine the best answer for each of the following questions.
1. Which performance plan pays employees a percentage of the volume
of sales for which they are responsible?
a. wage plan
b. bonus plan
c. commission plan
d. piece-rate plan
2. Which of the following is not a factor that can be used to determine
discrimination in equal compensation laws?
a. skill level
b. quantity of work
c. effort required
d. responsibility

THINK CRITICALLY
Answer the following questions as completely as possible.
3. Why do you believe most jobs are paid on a time plan rather than
a performance plan? Which type of compensation plan would you
prefer and why?
4. Why would some states choose to have a higher minimum wage
rate than the one established by the federal government? What
effect might the higher rate have on businesses
that operate in several states?

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