Future Business Leaders of America (FBLA) Personal Finance Practice Test

What factor is NOT typically considered in performance-based pay?

1. Employee tenure

2. Sales numbers

3. Project completion

4. Customer feedback

The correct answer is: Employee tenure

Performance-based pay is a compensation strategy where employees are rewarded based on their individual performance and contributions to the organization’s goals. Factors that are typically considered in performance-based pay include measurable outcomes, achievements, and results that directly relate to an employee’s job responsibilities. Employee tenure, which refers to the length of time an employee has been with the company, is generally not tied to performance. It does not necessarily correlate with an individual's productivity or effectiveness in their role. Instead, performance-based pay focuses on current results, like sales figures, project completions, or customer feedback, which indicate the employee's current performance level rather than how long they have been employed. Thus, employee tenure does not typically factor into performance-based pay assessments.