The piece-rate system is based on the assumption that simply paying an employee more money will increase that person's motivation.

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The piece-rate system is a pay system where an employee is paid a fixed amount of money for each unit of output produced. This system is based on the assumption that paying employees more money for producing more units will increase their motivation to work harder and produce more output. However, research has shown that the relationship between pay and motivation is more complex than this assumption suggests, and other factors such as job satisfaction and recognition also play a role in employee motivation.

The Piece-Rate System Is Based on the Assumption That Simply