Which of the following forms of incentive pay programs would most likely lead to irreversible increases in employee compensation over the years?
A) Profit sharing
B) Lump-sum bonuses
C) Piece-rate pay systems
D) Merit-pay systems
E) Gain sharing

Question

Quizplus · Accepted Answer

Merit-pay systems result in permanent increases in compensation because they are based on a pay-for-performance model, where employees are given permanent raises based on their performance evaluations. This is unlike lump-sum bonuses, profit sharing, and gain sharing, which are typically one-time forms of compensation. Piece-rate pay systems also do not necessarily lead to permanent increases in compensation as they are based on the amount of work completed, not necessarily the quality of work.

Which of the Following Forms of Incentive Pay Programs Would