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:

Holding Wealth

The act of owning, managing, and retaining assets or capital with the goal of increasing financial security and potential for future income.

Double Coincidence of Wants

A situation in barter economies where two parties each hold an item the other wants, allowing them to exchange goods directly.

Specialization of Labor

A process in which individuals or groups of workers concentrate on specific tasks, aimed at increasing efficiency and output.

Transactions Costs

Expenses incurred when buying or selling goods and services, including costs beyond the price of the product, such as time, effort, and fees.