SPHR · Question #272
When properly applied, the pay structure most compatible with the goals of a differentiation strategy is:
The correct answer is C. Merit-based pay. A differentiation strategy focuses on innovation, quality, or service. Merit-based pay rewards high performers and supports customized recognition -- aligning with innovation and specialized Extract from HRCI-aligned HR knowledge (Total Rewards): SPHR-level compensation strategy
Question
When properly applied, the pay structure most compatible with the goals of a differentiation strategy is:
Options
- AAcross-the-board increases
- BLump-sum bonuses
- CMerit-based pay
- DA piecework plan
How the community answered
(30 responses)- A17% (5)
- B30% (9)
- C47% (14)
- D7% (2)
Explanation
A differentiation strategy focuses on innovation, quality, or service. Merit-based pay rewards high performers and supports customized recognition -- aligning with innovation and specialized Extract from HRCI-aligned HR knowledge (Total Rewards): SPHR-level compensation strategy integrates with business models: "Differentiation requires talent-driven pay systems that reward unique contributions and value creation," such as merit and incentive structures.
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