The lowest level recommended for a PFP system is four percent of the base salary in order for the money to be considered significant and for the PFP system to be effective.

Question

Quizplus · Accepted Answer

Research and expert recommendations on Pay for Performance (PFP) systems vary widely, and there is no universally agreed-upon "lowest level" for effectiveness. The perceived significance of the incentive can depend on various factors including organizational context, individual expectations, and the overall compensation package.

The Lowest Level Recommended for a PFP System Is Four