Outcome-based incentive compensation systems can only be used to motivate appropriate decision-making behavior when employees are empowered to understand the compensation system.

Question

Quizplus · Accepted Answer

Outcome-based incentive compensation systems rely on employees understanding how their actions will impact their pay, and employees can only make appropriate decisions if they understand the system. Therefore, employees must be empowered to understand the compensation system for it to be an effective motivator.

Outcome-Based Incentive Compensation Systems Can Only Be Used to Motivate