Which payment system ties pay to the amount produced or sold by the employee?

Which payment system ties pay to the amount produced or sold by the employee?

• A. Time rate
• B. Performance-related pay
• C. Piece rate
• D. Motivators

Answer: (C)

Pay linked to output is a piece-rate system. In this approach, employees are paid for each unit produced or sold, so their total earnings rise directly with how much they produce. This creates a clear incentive to maximize output and is particularly effective for simple, measurable tasks where output can be counted easily. By contrast, pay by time compensates for hours worked, not quantity; performance-related pay rewards overall performance or specific targets but isn’t necessarily tied to the amount produced; motivators refer to general factors that influence motivation, not a specific pay structure.

Pay linked to output is a piece-rate system. In this approach, employees are paid for each unit produced or sold, so their total earnings rise directly with how much they produce. This creates a clear incentive to maximize output and is particularly effective for simple, measurable tasks where output can be counted easily. By contrast, pay by time compensates for hours worked, not quantity; performance-related pay rewards overall performance or specific targets but isn’t necessarily tied to the amount produced; motivators refer to general factors that influence motivation, not a specific pay structure.