SECTION 2WORK

The reward for work

GCSE ECONOMICS: UNIT 11

Part One

SECTION 2WORK

Aims of today’s lesson …

• Identify how people are paid and rewarded for working

• Analyse the rewards for work in context

SECTION 2WORK

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

SECTION 2WORK

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

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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

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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

SECTION 2WORK

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

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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

SECTION 2WORK 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

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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

SECTION 2WORK

Extension Task...

• Complete the case study by accessing the document called...

“2.2 The reward for work”