David Kelley is considering the implementation of an incentive wage plan to increase productivity in his small manufacturing plant. The plant is nonunion, and employees have been compensated with only an hourly-rate plan. Julie Phelps, Vice President–Manufacturing, is concerned that the move to an incentive compensation plan will cause direct laborers to speed up production and, thus, compromise quality. Step 1 - With that information in mind, discuss the following questions. Your posting should be at least 500 words* in length. This means you should elaborate on your answers, not simply answer each question with one or two words. You should also reference information already learned in our studies. How might Kelley accomplish his goals while alleviating Phelps’ concerns? Does the compensation have to be all hourly rate or all incentives? Can incentive compensation also apply to service businesses?
David Kelley is considering the implementation of an incentive wage plan to increase productivity in his small manufacturing plant. The plant is nonunion, and employees have been compensated with only an hourly-rate plan. Julie Phelps, Vice President–Manufacturing, is concerned that the move to an incentive compensation plan will cause direct laborers to speed up production and, thus, compromise quality. Step 1 - With that information in mind, discuss the following questions. Your posting should be at least 500 words* in length. This means you should elaborate on your answers, not simply answer each question with one or two words. You should also reference information already learned in our studies. How might Kelley accomplish his goals while alleviating Phelps’ concerns? Does the compensation have to be all hourly rate or all incentives? Can incentive compensation also apply to service businesses?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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David Kelley is considering the implementation of an incentive wage plan to increase productivity in his small manufacturing plant. The plant is nonunion, and employees have been compensated with only an hourly-rate plan. Julie Phelps, Vice President–Manufacturing, is concerned that the move to an incentive compensation plan will cause direct laborers to speed up production and, thus, compromise quality.
Step 1 - With that information in mind, discuss the following questions. Your posting should be at least 500 words* in length. This means you should elaborate on your answers, not simply answer each question with one or two words. You should also reference information already learned in our studies.
- How might Kelley accomplish his goals while alleviating Phelps’ concerns?
- Does the compensation have to be all hourly rate or all incentives?
- Can incentive compensation also apply to service businesses?
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