Types of compensation schemes

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Plan 1 Max's Bicvales modifies the traditional svstem. While thev fol ow the same general scheme as ABC Widgets, they add a dimension of profit sharing where each employee is awarded a share of the firm's net profits on an annual Dasis. The share or net pronts is determined oy the percentage or total salaries each employees individual salarv represents... so. higher earners receive higher bonuses.

Plan 2 Arthurs Fora Creations has equip major goal of their compensator system. There are job categories, but each category only has one salary regardless orthe length or service/tenure. All management positions, including the CEO, have salaries that are a multiple of the average non management positions, For instance, the CEO salarv might be twenty times the average, the Vice President's salary fifteen times the average, etc.

The scenario presented two types of compensation schemes. Choose the one that you found most interesting, describe it, and provide at least one advantage and one disadvantage that you associate with it. Would it be appropriate for all types of jobs, or just certain categories? When you reply to your classmates, you should agree or disagree (respectfully) and state your rationale for your position.

Reference no: EM133180964

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