How does Activity Based Compensation Work?

A value for each activity is calculated using Engineered Labor Standards, the Activity Based Compensation matrix, and each employee’s wage rate.

Our GenTrax workforce analysis software provides the infrastructure you need to enable accurate calculation of Activity Based Compensation programs and consistent reporting from multiple departments and facilities.

Activity Based Compensation consists of Event Pay, Unit Pay, Delay Pay, and GainShare Incentives.

Event Pay is compensation for events occurring during the employees work day that have been assigned a specific value. Start of shift, obtaining a work assignment, paid breaks, end of shift, and pre and post trip vehicle inspections are all Event Pay items.

Unit Pay applies to production work. The employee receives Unit Pay based on the work assignment (size of assignment, travel distance to complete assignment, and equipment used are some examples of the components). Unit Pay items are eligible for GainShare Incentives.

Delay Pay compensates the employee for meetings, major spill clean up, major collapse of product, battery changes, store receiving doors blocked for delivery, and other similar items. Delay Pay is paid at the employee’s wage rate for the duration of the delay, but does not allow any opportunity for additional work assignments or GainShare Incentives. Delay Pay is less valuable to the employee than Unit Pay since it only compensates for their time not their additional productivity.


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