After studying this chapter you should be able to:

1. Understand how individual pay is determined.
2. Define variable pay and discuss the various incentive programs that can be used in such a system.
3. Explain why merit pay may cause employees to compete rather than cooperate.
4. Compare the various gainsharing systems (Lincoln Electric plan, Scanlon plan, Rucker plan, ImproShare, business plan, gainsharing, winsharing, and spot gainsharing).
5. Recognize the significant changes in and learn to differentiate among these innovations: skill-based, knowledge-based, credential-based, feedback, and competency-based pay.
6. Describe such pay issues as secrecy, security, and compression.