Financial and non-financial rewards
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Flip to reveal answersWhat is the difference between wages and salary?
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All 15 Flashcards — Financial and non-financial rewards
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Question
What is the difference between wages and salary?
Answer
Wages are usually paid per hour/units; salary is a fixed annual amount paid monthly regardless of hours.
💡 Hint
Hourly vs fixed.
Question
Salary is usually ______ (fixed/variable) pay.
Answer
Fixed.
💡 Hint
Certainty.
Question
Give one factor to consider when choosing a reward system.
Answer
Nature of the work, employee preferences, business objectives, cost, culture, or motivational impact.
💡 Hint
Match system to context.
Question
Why might salary suit quality-focused work better than commission?
Answer
Salary supports consistent standards; commission may encourage aggressive selling over quality.
💡 Hint
Quality vs sales pressure.
Question
What is commission?
Answer
Pay linked to sales value or volume, common for sales roles.
💡 Hint
Sales-linked pay.
Question
Commission is pay linked to ______.
Answer
Sales.
💡 Hint
Sales-based reward.
Question
How can profit sharing support business objectives?
Answer
It aligns employees with overall business performance and encourages teamwork toward profitability.
💡 Hint
Align incentives.
Question
What is profit sharing?
Answer
Employees receive a share of business profits, aligning employee interests with business performance.
💡 Hint
Share profits.
Question
Profit sharing links employee reward to business ______.
Answer
Profit.
💡 Hint
Align interests.
Question
What is performance-related pay (PRP)?
Answer
Pay linked to meeting specific performance targets (often set during appraisal).
💡 Hint
Targets = pay.
Question
Fringe benefits are ______ rewards with financial value.
Answer
Non-cash.
💡 Hint
Benefits, not cash.
Question
Why can variable pay reduce risk for the business?
Answer
Bonuses/commission can turn fixed labour costs into variable costs that fall when sales/profits fall.
💡 Hint
Fixed → variable.
Question
Why should reward-system answers link to motivation theory?
Answer
Because rewards affect motivation differently (e.g., Herzberg: money prevents dissatisfaction but motivators create true motivation).
💡 Hint
Use theory + apply.
Question
Give two examples of fringe benefits.
Answer
Company car, private healthcare, pension contributions, gym membership, subsidised housing.
💡 Hint
Non-cash benefits.
Question
Exam tip: Best reward answers consider business costs AND employee ______.
Answer
Motivation.
💡 Hint
Impact on people.
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Full study notes for Financial and non-financial rewards
Topic 2.4 hub
Motivation and demotivation
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