Question

Mechateron Inc., a mechanical products manufacturing company, pays its employees $1 for every 10 fiberglass pipes they weld. In this scenario, which of the following performance-based reward systems is Mechateron Inc. most likely using?

1) Piece-rate system
2) Commission system
3) Profit-sharing system
4) Merit-based system

Answer 1

Mechateron Inc. compensates its employees with a piece-rate system for every ten fiberglass pipes welded, differing from the commission, profit-sharing, and merit-based systems.

Step-by-step explanation:

Mechateron Inc., a mechanical products manufacturing company, is likely using a piece-rate system as it pays its employees based on the number of fiberglass pipes they weld. A piece-rate system rewards employees for each unit of output they produce, in contrast to systems like a commission system that relates to sales, a profit-sharing system that ties to the company's profitability, or a merit-based system that is about performance relative to job requirements and often includes many factors other than just production quantity.