Which term describes a wage system in which the employee is paid for each unit of production at a fixed rate?

Which term describes a wage system in which the employee is paid for each unit of production at a fixed rate?

• A. Performance-Based Pay
• B. Permanent Assignment
• C. Piece Rate
• D. Perquisites (Perks)

Answer: (C)

Piece rate is a wage system where you’re paid for each unit of output at a fixed rate. This ties earnings directly to how much you produce, so more units mean more pay. For example, at $2 per unit, producing 150 units would earn $300 before deductions. This approach can boost productivity and simplify payroll, but it may also encourage rushing or affect quality unless safeguards like quality standards are tied to the payment. In contrast, performance-based pay looks at broader metrics beyond quantity, while permanent assignment is about where you work, and perquisites are extra benefits rather than base pay for output.

Piece rate is a wage system where you’re paid for each unit of output at a fixed rate. This ties earnings directly to how much you produce, so more units mean more pay. For example, at $2 per unit, producing 150 units would earn $300 before deductions. This approach can boost productivity and simplify payroll, but it may also encourage rushing or affect quality unless safeguards like quality standards are tied to the payment. In contrast, performance-based pay looks at broader metrics beyond quantity, while permanent assignment is about where you work, and perquisites are extra benefits rather than base pay for output.