Each of the following is true regarding individual PFP plans EXCEPT:
A)Individual PFP plans can be divided into merit pay systems and incentive systems tied to production rates.
B)For a merit pay plan, performance is generally measured through performance appraisal.
C)Incentive plans rely on some countable result as a basis for setting the PFP rate.
D)The greatest strength of the merit pay plan is its ability to create a clear linkage between employee performance and pay.
E)Incentive pay is based on units produced and provides the closest connection between performance and pay.

Question

Quizplus · Accepted Answer

The greatest strength of the merit pay plan is often debated, but many argue that its ability to create a clear linkage between employee performance and pay is not its strongest aspect. This is because merit pay systems can be subjective, relying on performance appraisals that may not accurately reflect performance, leading to perceptions of unfairness or bias.

Each of the Following Is True Regarding Individual PFP Plans