Business Degree Certification Practice Test

According to Frederick Taylor's scientific management theory, what pay principle did he develop?

1. Hourly pay

2. Incentive pay

3. Profit sharing

4. Monthly salary with bonus

The correct answer is: Incentive pay

Frederick Taylor's scientific management theory emphasized efficiency and productivity in the workplace through systematic study and measurement of tasks. One of the key principles he developed was the concept of incentive pay, which is designed to motivate employees to enhance their performance and output. With this pay principle, workers received compensation that was directly linked to their productivity levels; essentially, the more they produced, the more they earned. This approach was intended to encourage maximum efficiency by rewarding workers for higher performance, aligning their financial interests with the goals of the organization. Incentive pay aligns with the principles of scientific management because it fosters a competitive environment in which productivity gains are tangible and rewarded, thereby motivating employees to optimize their work processes. Such a structure contrasts with other pay systems that may not provide a direct correlation between effort and compensation, leading to different motivational dynamics in the workforce.