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Common Compensation Systems: Salary, Hourly, Contractor, Pay-For-Performance

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Stan is paid $10 for each hour he works. Why is this an example of a wage?

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1. Tanya is negotiating with her employer about a new contract. They have agreed that she will be paid by commission. Identify which of the following BEST reflects such a deal:

2. Tabatha is an accountant. She's paid a base salary in addition to the possibility of more compensation if she exceeds the firm's minimum billable hours she's expected to generate. What is this type of compensation system called?

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About This Quiz & Worksheet

This quiz and corresponding worksheet will help you gauge your understanding of the types of compensations systems available to workers. In order to do well on this quiz, you'll need to know the correct terms to describe the various types of compensation systems.

Quiz & Worksheet Goals

Use these assessment tools to measure your knowledge of:

  • The types of direct compensation
  • Compensation built on a base salary plus the possibility of extra earnings by meeting performance standards
  • The type of compensation involving employer-sponsored health care
  • Compensation based on a contract with no payroll taxes withheld

Skills Practiced

This worksheet and quiz will let you practice the following skills:

  • Defining key concepts - ensure that you can accurately define main phrases, such as direct compensation and salary
  • Reading comprehension - ensure that you draw the most important information from the related types of compensation systems lesson
  • Interpreting information - verify that you can read information regarding the various types of compensation systems, including direct compensation, and interpret it correctly

Additional Learning

To learn more about the various types of compensation systems available to workers, review the corresponding lesson on the Types of Compensation Systems. This lesson covers the following objectives:

  • Define the word 'salary'
  • Explain the term 'wage'
  • Identify the type of direct compensation involving wages
  • Know the type of direct compensation involving commission
  • Learn the defining characteristics of pay-for-performance
  • Appreciate the type of compensation involving employer-sponsored health care
  • Understand the essential nature of independent contractor fee in terms of compensation
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