Some Types of Individual Wage Incentive Plans Gain-Sharing Plans
Example cont. The employee performs 40% above standard and shares half (50%) of this 40% gain with the company -- leaving 20% of the standard for the employee’s bonus
Thus the employee earns 120% of the standard pay (which is $10 per hour for 40 hours or $400)
Ergo, the employee earns 1.20 x $400 = $480 which for 40 hours corresponds to an hourly wage of $12 per hour