Which of the following is true about the level of risk involved with incentive pay?
A)It decreases as incentive pay represents a greater proportion of total core compensation.
B)It is lower for higher-level employees than for lower-level employees.
C)It depends on the extent to which employees control the attainment of a desired goal.
D)It is dependent on subjective performance appraisals.

Question

Quizplus · Accepted Answer

The level of risk involved with incentive pay depends on the extent to which employees control the attainment of a desired goal. For example, if the goal is dependent on factors outside of an employee's control, such as the economy or the actions of other employees, the risk is higher. If the goal is entirely within the employee's control, such as meeting a sales goal, the risk is lower. The other options are not necessarily true about the level of risk involved with incentive pay.

Which of the Following Is True About the Level of Risk