Which of the Following Is a Disadvantage of a Merit

question 64

Multiple Choice

Which of the following is a disadvantage of a merit pay system?

• A) It does not relate the rewards to economic conditions.
• B) It cannot be used effectively with performance appraisals.
• C) Comparative pay is not considered in its evaluation.
• D) It does not provide rewards for performance in all the dimensions measured in the organization's performance management system.
• E) It can quickly become expensive for the company.

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Definitions:

Marginal Product of Labor

The additional output produced as a result of adding one more unit of labor, holding all other inputs constant.

Marginal Cost

The cost of producing one additional unit of a product.

Additional Unit

The next unit of production or consumption, considered in analysis of changes in benefit or cost from increasing quantity.

Fixed Cost

Business expenses that remain constant regardless of the level of production or sales activity, such as rent or salaries.