Wayne Inc., a health insurance company, pays clerks an incentive based on the average amount of work completed per hour. Wayne pays $10 for processing 20 invoices per hour. An employee who processes 30 invoices would earn $15 per hour. Hence, Wayne pays the same rate per invoice no matter how many invoices an employee processes per hour. Which type of incentive pay does this scenario illustrate?

A) straight piecework plan
B) falling differential
C) rising differential
D) standard hour plan
E) straight commission plan

Question

Vaughan van Heerden · Accepted Answer

Final Answer : A, Explanation :  This scenario illustrates a straight piecework plan, where employees are paid a fixed amount per unit of output regardless of the number of hours worked. In this case, the incentive pay is based on the average amount of work completed per hour, which is a typical feature of a straight piecework plan.

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