What type of compensation system rewards employees with a fixed amount for each unit of work produced?

The type of compensation system that rewards employees with a fixed amount for each unit of work produced is known as the piece rate system. This approach incentivizes productivity, as employees earn a specific amount for each item they complete or produce, making it a direct method of payment based on output. Such systems are commonly used in manufacturing or piecework jobs where the volume of work can easily be measured, allowing both employees and employers to benefit from increased output.

Commission and hourly wage compensation systems do not specifically reward based on units produced. Instead, commissions are typically a percentage of sales generated while hourly wages pay employees a fixed rate for the hours they work, regardless of the quantity of work done. Salary, on the other hand, offers a fixed annual amount regardless of performance metrics like units produced. Thus, the piece rate system stands out as the most direct link between compensation and the volume of work completed.