Final answer:
Base pay is a fixed amount of money received by employees for regular work, while contingent pay is variable and depends on performance or specific targets.
Step-by-step explanation:
In the context of financial rewards for employees, base pay refers to the fixed amount of money an employee receives for their regular work hours, regardless of their performance or productivity. Contingent pay, on the other hand, is a variable form of compensation based on the employee's performance and is usually offered in addition to the base pay. It is contingent upon achieving certain goals or targets, such as sales targets or project completion.
For example, let's consider two employees working in sales. They both have a base salary of $50,000. Employee A receives a 10% commission on every sale they make, which means their pay is contingent upon the number of sales they generate. Employee B, on the other hand, does not receive any additional commission and solely relies on their base salary.
So, the key difference between base pay and contingent pay is that base pay is a fixed amount, while contingent pay is variable and depends on the employee's performance or achievement of specific targets.