Songreen Inc.,a firm that manufactures ready-to-eat soups,offers incentives based on an employee's performance rating and the employee's compa-ratio.Which of the following payment plans is exemplified in this scenario?
A) Piecework plan
B) Merit pay
C) Standard hour plan
D) Differential plan
E) Skill-based plan

Question

Quizplus · Accepted Answer

This scenario exemplifies a merit pay program. To make merit increases consistent, so they will be seen as fair, many merit pay programs use a merit increase grid. The decisions about merit pay are based on two factors: an individual's performance rating and the individual's compa-ratio. This system gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.