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Chapter 7

2.2 Methods of reward

Basic pay Hourly rate or fixed annual salary

 Additional rewards, e.g. pension
schemes
Benefits
 Can be flexible to suit needs of
employee

Option to purchase shares at a specified
Share options price and date – should incentivise
employees to increase share price

 Pay based on performance of
individual, team or organisation

Performance-related  Examples include piecework systems,
pay performance-related pay based on
achievement of individual, team or
organisation’s objectives, knowledge
contingent pay, commission

Illustrations and further practice

Now try TYU question 2 from Chapter 7 of the Study Text

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