Daichi Inc. is a Japanese software development firm known for its high quality products. Recently, the company held its annual conference and awarded all those employees who were in the top five percent with substantial monetary rewards. Their performance was evaluated on the basis of target achievement, client feedback, and quality ratings. Employees whose performance had not changed drastically were given a minor raise and those who fared badly received no incentives. Many employees blamed the company for creating differences among employees because they felt that it would harm the company in the long run, but Daichi Inc. truly believes that to retain and motivate its best performers, a large incentive is a good step. Daichi Inc. is using a(n) ________ here.
A) piece-rate plan
B) employee stock ownership plan
C) modular plan
D) merit-based plan
E) flexible benefits plan

Question

Quizplus · Accepted Answer

A merit-based pay plan pays for individual performance based on performance appraisal ratings. Daichi Inc. rewarded these employees on the basis of meritorious performance.