How Does Merit Pay Differ from Incentive Pay

question 20

Multiple Choice

How does merit pay differ from incentive pay?

• A) Merit pay is awarded to salaried employees while incentive pay is a reward for those who are wage-employees.
• B) Merit pay typically relies on subjective performance appraisal ratings, and incentive pay is often based on the achievement of performance that can be quantified.
• C) Incentive pay is a permanent increase, and merit pay is a one-time increase in pay.
• D) Merit pay plans give managers more latitude in determining large distributions of rewards
• E) Merit pay is more closely tied to the organizational vision, strategy, and culture than incentive pay.

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