Regardless of the number of cars sold, a small car dealership pays $6,000 to its top-selling salesperson, $5,000 to the second highest, $4,000 to the third highest, and so on. The dealership is using a:

Question

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The dealership is using a tournament compensation scheme, where employees compete against each other for higher payouts based on their ranking. The fixed amount paid regardless of the number of cars sold indicates that the focus is on relative performance rather than absolute performance, ruling out option B. Option D is not a common term used in compensation schemes and does not fit the context. Option A is also not applicable as employees are not paid per piece or per sale.

Regardless of the Number of Cars Sold, a Small Car