Which of the following statements about merit pay plans is true?
A) Under merit pay plans, performance is usually measured objectively.
B) Traditional merit pay plans entail considerable risk for employees.
C) With merit pay plans, base pay is set at the market rate.
D) Merit pay raises will be removed if performance declines.
E) The size of merit pay adjustments is typically greater than that awarded under the incentive and earnings-at-risk plans.

Question

Quizplus · Accepted Answer

Merit pay plans typically set base pay at the market rate, and then offer additional pay based on performance. This ensures that employees' base salaries are competitive, while still rewarding high performance.

Which of the Following Statements About Merit Pay Plans Is