Performance-based Economy

Outcome-based methods are used in some businesses. For whole companies, outcome-based evaluations are the basis of stock exchange prices: Companies which produce higher profit growth are more valuable than companies which perform poorly. Employees who are paid for piecework or by commission are examples of traditional employment use of outcome-based pay. Alternatives include seniority systems (oldest worker gets highest pay).

Many private employers give standards-based tests to determine whether job applicants have necessary job skills (such as typing speed), and nearly all government employees have to take and pass a civil service examination. Furthermore, nearly all licensed professionals, from nurses to truck drivers to beauticians, already take such tests as a condition of entering their professions. Often these tests have disproportionate failure rates for disadvantaged subgroups, such as school dropouts and impoverished people.