Question

Under what conditions would you suggest that a performance-based pay plan be implemented for an employee?

A) The employee's decisions are directly tied to the company's performance
B) The employee is a top performer
C) The company is struggling financially and is about to file for bankruptcy
D) The company has many suitable candidates to fill that employee's position

Answer 1

The correct answer is (A) The employee's decisions are directly tied to the company's performance.

Step-by-step explanation:

1. D

2.C

3.C

4.C

5.C

6.A

7.C

8.A

9.A

10.B

Answer 2

B) The employee is a top performer

Step-by-step explanation:

The performance-based pay system rewards an employee based on their performance against a set of pre-agreed objectives. This pay structure motivates employees to work harder and increases labor efficiency.

Since the performance-based pay compensation is tied to the employees' contributions to the company, only the top-performing employees survive in this pay structure.