What is the term for a compensation method where employees are paid a standard rate for each unit produced?

The term for a compensation method where employees are paid a standard rate for each unit produced is referred to as piecework. This method focuses on rewarding employees based on their productivity, where they earn a specific amount of money for every unit they complete or produce. This incentive structure can effectively motivate workers to increase their output, as their earnings are directly tied to the quantity of units they produce. Piecework is often utilized in manufacturing and production environments, where output can be easily measured, making it a clear and straightforward compensation strategy.

In contrast, hourly wages pay employees based on the time they work rather than their output, salaries provide a fixed payment regardless of the number of units produced, and commissions are typically associated with sales roles, where employees earn a percentage of sales they generate rather than payment per unit of production. Each of these alternatives focuses on different aspects of compensation rather than the unit-based productivity that characterizes piecework.