Business unit 2 definitions

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Payment systems - Piece rate
A method of paying employees for each unit of output they produce
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Payment systems - Time rates
Employees are paid a set rate for a specific length of time (e.g per hour)
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Payment systems - Salary
Monthly payments, based on annum
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Payment systems - Fringe benefits
Payments to workers in a non-monetary form (e.g company cars or private healthcare)
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Bonuses
Additional financial reward given to a worker in recognition for their contribution
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Performance related pay
Used to motivate employees by linking their pay to the achievement of pre-agreed performance targets
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Profit sharing
A scheme which involves distributing a share of the profits made by the company to its workforce
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Share ownerships
Employees gain shares in the company & then receive a share of profits via dividend distribution
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Improving job design
Job must be meaningful and interesting - the 'design' must be well suited for the person
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Job enrichment
The system of making an employees tasks more interesting
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Job enlargement
Giving workers more tasks to do in the same production process (so they can see a product from start to finish)
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Empowering employees
Giving employees greater control by providing them with decision-making powers (that have an effect on their working lives)
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Price skimming
Setting a high initial price for a new product in order to recoup costs
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Price penetration
Setting a low initial price for a new product in order to get a foothold in the market
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Price leaders
Where firms that dominate a market with an existing product set the price and other firms in the market follow suit
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Price takers
Where firms set their prices based on the market price
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Loss leaders
The selling of products at below the cost of making the product
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Psychological pricing
Occurs when the firm set a price for the product in order to entice the customer into making a purchase
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Destroyer pricing
Deliberate price cutting to force rivals out of business
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Price discrimination
Charging a different price for the same good / service in different markets
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Other cards in this set

Card 2

Front

Employees are paid a set rate for a specific length of time (e.g per hour)

Back

Payment systems - Time rates

Card 3

Front

Monthly payments, based on annum

Back

Preview of the back of card 3

Card 4

Front

Payments to workers in a non-monetary form (e.g company cars or private healthcare)

Back

Preview of the back of card 4

Card 5

Front

Additional financial reward given to a worker in recognition for their contribution

Back

Preview of the back of card 5
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