Date of Award

2020

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Yu, Sherry

Area of Concentration

Economics

Abstract

Labor compensation is a topic that has been core to the field of economics for centuries. In this time multiple methods of compensation have arisen. These can be either monetary, in the form of salaries, wages, or commissions. They can also be non-monetary in the form of insurance, the providing of necessities. For wages and salaries, the main pitfall is in terms of verification. Without high levels of oversight employers cannot be certain that their employees are being productive for the amount they are being payed. These payment methods also do not necessarily give the employee incentive to take actions that would benefit the firm the most. Compensation through commissions and bonuses can be used to supplement these issues. Commissions can give direct increases in pay for increases in productivity, while bonuses can be used to direct focus to where the employer desires. The ideal compensation package would be one combining salary, commission, and bonuses, without non-monetary compensation.

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