What term refers to an agreed-upon amount of additional compensation paid when specific financial goals are met?

What term refers to an agreed-upon amount of additional compensation paid when specific financial goals are met?

• A. Benefits
• B. Brainstorming
• C. Bonus (compensation)
• D. Certification

Answer: (C)

This item tests understanding of incentive pay tied to performance. When employees receive an agreed-upon amount of extra money after hitting specific financial goals, that payment is called a bonus. It sits on top of base pay and is intended to reward achievement, serving as a motivator to reach targets. Bonuses can be fixed or based on a percentage and can be discretionary or part of a formal plan. Benefits are ongoing non-wage perks like health insurance or retirement plans, not extra pay tied to targets. Brainstorming is a group idea-generation process, not compensation. Certification is proof of meeting qualification standards, not an incentive payment.

This item tests understanding of incentive pay tied to performance. When employees receive an agreed-upon amount of extra money after hitting specific financial goals, that payment is called a bonus. It sits on top of base pay and is intended to reward achievement, serving as a motivator to reach targets. Bonuses can be fixed or based on a percentage and can be discretionary or part of a formal plan.

Benefits are ongoing non-wage perks like health insurance or retirement plans, not extra pay tied to targets. Brainstorming is a group idea-generation process, not compensation. Certification is proof of meeting qualification standards, not an incentive payment.