Which of the Following Statements Is True Regarding a Merit-Based

question 79

Multiple Choice

Which of the following statements is true regarding a merit-based pay plan?

• A) It distributes compensation based on an established formula designed around a company's profitability.
• B) It bases pay levels on how many skills employees have or how many jobs they can do.
• C) A typical merit-based pay plan provides no base salary and pays the employee only for what he or she produces.
• D) Unions typically resist merit-based pay plan.
• E) It is also called competency-based pay plan.

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Definitions:

Payroll

The total amount of wages, salaries, and other compensation that a company owes to its employees for a set period.

Treasurer's Department

A division within an organization responsible for managing the institution's cash, investments, and financing activities.

FICA Tax

Federal Insurance Contributions Act tax, which funds Social Security and Medicare, charged to both employers and employees.

Federal Unemployment Tax

A tax paid by employers to fund the government's unemployment benefits.