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Offsettable factors are essential in assessing wages. They vary depending on the type of work, including complexity of tasks, skill set, and efficiency. Piecework focuses on speed and quality, with pay rates set to allow for profit.
An offsettable factor is any item of work that is considered essential to properly assess the amount of wages that should be rendered as part of the employment. The range of factors that can be used to set wages and rates of pay will vary, with some unique to the task of assessing hourly wages, others to setting wages, and still others to work being compensated on a business by business basis. . Along with the actual units produced by labor effort, an offsettable factor can also be an element of work such as the employee’s skill set, the employee’s efficiency, and even the conditions under which the employee must work to produce the desired results.
With an hourly wage setting, one offsettable factor that usually has some impact on the compensation rate is the complexity of the tasks the employee performs as part of his or her job duties. Tasks classified as unskilled labor demands or highly repetitive in nature may result in a lower rate of pay. To some extent, the employee’s efficiency in performing those duties may result in an increase in compensation, such as a merit raise or an increase based on the person’s longevity of employment with the company. While these considerations will have some bearing on wages earned, the type of work involved will usually provide the crucial offsetting factor for assembly line work and similar types of jobs.
When it comes to paid positions, one compensated factor of great importance is usually the skill set the employee brings to the workplace. A combination of formal education and experience will often result in a higher salary and additional benefits in the overall compensation package. This is especially true if the employee’s past experience includes a string of successes in the business world, as this creates the perception that those successes can be replicated to the benefit of the new employer.
Employment based on piecework will also require consideration of one or two compensable factors. With this application, the focus is often on how quickly the employee can produce finished units of acceptable quality. For example, an employee who can produce ten units per hour of production versus one who can produce seven will likely be considered more valuable to the operation, since more finished units means more opportunities to make sales and generate profit. Typically, piece-rate firms view speed as an offsetting factor affecting the pay per finished unit offered, setting that pay rate at a point that is considered fair by the employee while still allowing the employer to make a decent level of profit from each unit sold.
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