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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Definitions:

Merchandise

Goods bought and sold by retailers.

Cash Collections

The process of gathering monies that are owed to a business by its customers or clients.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, prior to any purchases or production during the period.

Ending Inventory

The value of goods available for sale at the end of an accounting period after goods sold are subtracted.