Question

A sample calculation of bonus allocation based on information from the AHS report to provide specific calculations

Answer 1

There are two types of salary distribution:

1. Fair wage oriented allocation: This ensures the compensation is calculated depending on a proportion of how much salary the employee was paying.

   For this scenario, the workers' gross pay was one million dollars which meant the payout would be about twenty thousand dollars or 20 percent of the wages for each worker ($200,000/$1,000,000= $20,000 each). A lot of evidence suggests that an incentive of 8 percent is usually enough to inspire an individual to alter habits and do better— so the incentive of 20 percent was more than sufficient.

2. Allocation according to degree of participation: Perhaps the incentive will be to make up for employees depending on their company position. This can be achieved by splitting the pool into parts, where a certain proportion of the pool is worth any share. Therefore the incentive is focused on the number of shares granted to an individual-typically depending on their business status. The organization might offer front-line employees one stock each, whereas managers get two shares and top management get three.

   The business has 20 workers for Starters, who will have 25 shares depending on positions. A stake in this situation is valued $8000 ($200,000/25= $8,000). So a frontline worker might receive $8,000, a $16,000 boss and a $24,000 senior executive. It undoubtedly indicates that most senor citizens receive a larger proportion of their incentive pay.

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