What Is an Advantage of Bonuses Over Merit-Based Pay Plan

question 29

Multiple Choice

What is an advantage of bonuses over merit-based pay plan?

• A) Employees don't view bonuses as a part of their salary.
• B) Bonuses improve flexibility of the workforce.
• C) Bonuses are paid based on a formula.
• D) Bonuses improve performance of the group as a whole.
• E) Employees are rewarded for recent performance.

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Definitions:

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership stake of the proprietors.

Fees Earned

Fees earned constitute the income a company generates from providing services before any expenses are deducted.

Wages Expense

The total cost incurred by a company for the amount paid to its hourly employees during a reporting period.

Withdrawals

Money or assets taken out of a business by its owners for their personal use.