A New Manager Recently Was Given an Assignment to Create

question 121

Essay

A new manager recently was given an assignment to create two possible wage schemes for a design firm.The manager came up with the following packages:
(1)Each employee will start at $15 per hour and will work eight hours per day; (2)each employee will receive $8 per hour and one-tenth of 1 percent of profits (expected profits are $80,000 per day if everyone puts out maximum effort).Which program will motivate the employees more?
Which program would you choose?
Why?

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Definitions:

Investing Activities

Financial transactions related to the acquisition or sale of long-term assets and investments not related to the entity's primary business operations.

Financing Activities

Transactions and events where cash is raised or paid back to finance the company's operations, including issuing debt, equity, and paying dividends.

Operating Activities

Transactions and other events that are not investing or financing activities which affect the net income of a company.

Cash Flows

The movement of money into and out of a business, project, or financial product.