Merit-Pay Plans Which Rate Workers Relative to Their Peers

question 50

Multiple Choice

Merit-pay plans which rate workers relative to their peers

• A) are very popular among nonmanagerial employees.
• B) generally cause workers to cooperate better.
• C) can account for factors in the external environment that affect an individual's output.
• D) work best when there is a bunching of ratings.

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Definitions:

Nominal Rate

The advertised or stated interest rate on a loan or investment, not accounting for any fees or compounding of interest.

Effective Rate

The real interest rate on an investment or loan, taking into account the effect of compounding over a given period.

Compounding Interval

The frequency at which interest is added to the principal amount of an investment or loan which can affect the total interest earned or paid.

Compounded Monthly

In finance, it refers to the process of computing interest on an investment or loan on a monthly basis, with each month's interest being added to the principal for the calculation of subsequent interest.