Why are some compensation plans referred to as variable pay?
A) because employee pay varies with market pay
B) because employee pay is comprised of varying components
C) because employee pay is linked to performance
D) because employer costs vary with the incentives offered

Question

Quizplus · Accepted Answer

Variable pay plans are those in which an employee's pay is linked to their performance, such as commissions, bonuses, or profit-sharing. The amount paid can vary depending on the level of achievement, which can provide an additional incentive for employees to improve their work performance.

Why Are Some Compensation Plans Referred to as Variable Pay