Which compensation method generally focuses on rewarding performance based on specific outputs or results?

Prepare for the HRM/324T Total Compensation Test with engaging flashcards and multiple-choice questions. Boost your understanding with explanations for each question and get exam-ready!

The piece rate compensation method is specifically designed to reward employees based on the amount of work they produce or the results they achieve. This approach aligns compensation directly with performance outputs, incentivizing workers to increase their productivity because their earnings are tied to the quantity or quality of their work. For example, in manufacturing or sales, employees may be paid a specific amount for each unit produced or sale made, encouraging higher output.

In contrast, the other compensation methods do not primarily focus on specific outputs or results. Salary provides a fixed amount regardless of performance levels, job-based pay is typically determined by the roles' responsibilities rather than performance, and equity compensation, while it can reward company performance, primarily ties employee earnings to the company's stock value rather than direct individual output. Therefore, piece rate stands out as the compensation method that directly correlates pay with measurable performance results.

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