C236 - Topic 9 Questions with Verified Correct
Answers
Commission-based
Commission-based reward systems are most often used for jobs with a sales component and
provide employees a set percentage of the sales that they make.
Control Costs
Without a variable pay component, labor costs remain the same even when revenues, sales, or
profits drop. Performance-based pay helps ensure that when performance is low, the
company's cost structure is also reduced.
Cost of Living Adjustment (COLA)
A periodic salary or wage increase to compensate for inflation.
Differential Piece Rate
A system in which a lower rate is paid for the first 10 units assembled, and then a higher rate
is paid for each unit over 10 assembled.
Fixed Rewards
Remain constant independent of changes in the criteria.
Gain Sharing
Is a system of establishing a baseline of unit-level results and sharing improvements above
that baseline with employees in that unit.
Group-based Variable Pay
Answers
Commission-based
Commission-based reward systems are most often used for jobs with a sales component and
provide employees a set percentage of the sales that they make.
Control Costs
Without a variable pay component, labor costs remain the same even when revenues, sales, or
profits drop. Performance-based pay helps ensure that when performance is low, the
company's cost structure is also reduced.
Cost of Living Adjustment (COLA)
A periodic salary or wage increase to compensate for inflation.
Differential Piece Rate
A system in which a lower rate is paid for the first 10 units assembled, and then a higher rate
is paid for each unit over 10 assembled.
Fixed Rewards
Remain constant independent of changes in the criteria.
Gain Sharing
Is a system of establishing a baseline of unit-level results and sharing improvements above
that baseline with employees in that unit.
Group-based Variable Pay
