Page 84 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

For example all workers might receive a discount if they want to buy the fi rm’s
products, but only managers receive a company car.
The main advantage of fringe benefits is that they can help in the recruitment

and retention of workers. The main disadvantage is that fringe benefits are oft en

linked to status and not performance.
KEY TERM Profit-sharing

Profi t-sharing is an additional payment to all staff based on the profits of the business.
Profit-sharing: an additional It is usually paid once a year. It may be in the form of a cash payment, calculated as a
payment to workers based on the
percentage of a worker’s wage or salary, or workers may be given shares in the company.
profits of the business.
It can be used to provide additional financial reward to all workers, or just

certain groups of workers. The argument for using profit-sharing to reward workers

is that everyone – from senior managers to production workers – has contributed to

the business earning the profit and they should all, therefore, share in the success.
The main advantage is that profit-sharing is directly linked to the performance

TOP TIP

of the business. The better the performance, the higher the profit and the greater

Focus on understanding how

different rewards may motivate the share of profits for workers.

workers not just learning what the The main disadvantage is that any profit given to employees might reduce the

different rewards are. dividends to shareholders or reduce the amount available to be reinvested into
the business.
ACTIVITY 6.5
Read the two job adverts for vacancies at the same health and fitness company and then answer the questions that follow.
82
Advert A Advert B
Director of Communications Receptionist
and Marketing We require a full-time receptionist for our new
Salary package $100,000+ health and fitness club.
We are looking for an exceptional You must have a confident telephone manner
communications professional to take forward and a friendly and cheerful personality is more
an ambitious, far-reaching communications important than formal qualifi cations.
strategy. You will have a strong track record We can offer a good working environment and
in communications and marketing, excellent an hourly wage rate of $6 per hour. Hours of
interpersonal skills and well-developed strategic work are between 37 and 42 hours per week.
leadership skills, ideally in a health and fitness
related environment. Appropriate professional No experience necessary as full training will be
qualifi cations are also a requirement of this key provided.
senior management post.
We offer an attractive rewards package to
include a high basic salary plus performance
related bonuses, company car, free health
insurance, company pension and relocation
expenses.