Which of the following is a disadvantage of incentive compensation plans?
A) Employees know that a rise in productivity will have no impact on their compensation.
B) Employees are taxed heavily on their income from incentive plans.
C) Employers are taxed heavily on their expenditure incurred through incentive plans.
D) Employees don't develop loyalty to their employers when incentive plans are practiced.
E) Employers are unable to increase employee productivity while following incentive plans.

Question

Quizplus · Accepted Answer

Salespeople compensated primarily by incentives don't develop loyalty to their employer. The employer doesn't guarantee them an income, so they feel no obligation to the firm.

Which of the Following Is a Disadvantage of Incentive Compensation