For employers,the chief advantage of royalties and commissions is that these pay policies:
A)promote teamwork and cooperation
B)increase turnover
C)reduce shirking where work effort is costly to observe
D)reduce income variability

Question

Quizplus · Accepted Answer

Royalties and commissions are directly tied to an employee's performance and output, which means that the employer is more likely to get the desired results from the employee. This is because it reduces shirking where the work effort is costly to observe. It incentivizes employees to work harder and produce more since their pay is tied to their output. This is different from a traditional wage or salary, where employees can shirk and still receive their full pay. The other choices are not accurate as royalties and commissions are not for promoting teamwork and cooperation or increasing turnover, and they may increase income variability.

For Employers,the Chief Advantage of Royalties and Commissions Is That