Economists call a compensation scheme in which pay is based on relative performance a:
A) profit sharing plan.
B) bonus plan.
C) salary.
D) tournament.

Question

Quizplus · Accepted Answer

A tournament compensation scheme rewards employees based on their relative performance compared to their colleagues. It encourages competition and can lead to higher productivity and motivation among employees. Profit sharing plans and bonus plans are not based on relative performance, while a salary is a fixed amount of pay regardless of performance.

Economists Call a Compensation Scheme in Which Pay Is Based