Marty and Biff both work for the same company producing the same teacups. Because they get paid a certain amount for each teacup they produce, and because Biff produces more teacups than Marty, Biff makes more money than Marty. This scenario is an example of a ______.

A) piece rate plan
B) profit sharing plan
C) merit pay plan
D) gainsharing plan

Piece Rate Plan

A compensation system where employees are paid based on the quantity of work they produce or tasks they complete.

Profit Sharing Plan

An incentive program where employees receive a portion of the company's profits, encouraging performance and aligning interests within the organization.

Merit Pay Plan

A compensation strategy that rewards employees based on their performance and achievements.