Merit pay differs from bonus programs in what way?
A) Merit pay raises the employee's base pay permanently; bonuses do not.
B) Bonuses are nonfinancial rewards; merit pay is a financial reward.
C) Merit pay is disbursed several times a year; bonuses are given on a yearly basis.
D) Bonuses are used much less often than merit pay in individual-based pay plans.

Question

Quizplus · Accepted Answer

Merit pay permanently increases an employee's base pay, while bonuses are one-time payments that do not permanently increase the base pay.

Answer: B
 Bonuses can include nonfinancial rewards such as gift cards or trips, while merit pay is a financial reward that increases an employee's base pay.

Answer: A
 Merit pay is typically given on an ongoing basis and permanently increases an employee's base pay, while bonuses are usually given once a year and do not permanently increase the base pay.

Answer: A 
 Merit pay is commonly used in individual-based pay plans to reward high-performing employees, while bonuses may be used less frequently or in different ways, such as team-based incentives.

Merit Pay Differs from Bonus Programs in What Way