Larry produced 40 pressed inner fenders out of sheet metal per hour and got paid $24 per hour ($0.60 x 40) but Michelle only produced 30 inner fenders per hour and got paid $18.00 ($0.60 x 30).What type of compensation program are Larry and Michelle working under?
A)Commission
B)Merit pay
C)Straight piece rate
D)Bonus
E)Pay differential

Question

Quizplus · Accepted Answer

Larry and Michelle are working under a straight piece rate compensation program, where their pay is directly linked to the number of inner fenders they produce. This is because they are each paid a fixed rate per piece produced, regardless of the time taken to produce each piece or other factors such as quality or efficiency.

Larry Produced 40 Pressed Inner Fenders Out of Sheet Metal