Define pay for performance and describe two plans that utilize this co

QUESTION

Define pay for performance and describe two plans that utilize this compensation approach.

What will be an ideal response?

ANSWER

Answer: Pay for performance is a compensation structure that bases employee pay on the results produced. One plan under this structure is piece rate, where employees are paid according to how much output was produced. Another plan is sales commissions, which pays salespeople a percentage of what the company earned from their sales.
Explanation: Pay for performance bases employee pay on the results produced and is one of several compensation strategies to induce employee productivity. Under the piece rate plan, employees are paid according to how much output was produced. Under a sales commission plan, salespeople are paid a percentage of what the company earned from the sales they made.