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?

Question

Quizplus · Accepted Answer

The scenario describes a pay plan that provides incentives based on an employee's performance rating, which is the basis of a merit pay plan. The use of compa-ratio, or the comparison of an employee's salary to the market rate, can also be included in a merit pay plan as a way to adjust an employee's base salary. The other payment plans listed, such as piecework, standard hour, differential, and skill-based plans, do not include performance ratings or compa-ratio as factors in determining employee pay.