Which of the following statements about commission systems of compensation is false?
A)They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort.
B)During sluggish periods, an employer's payroll expenses will decline along with sales.
C)If workers are paid on the basis of the number of units produced, they may become less concerned about quality.
D)The lack of income stability will induce the more productive workers to leave in search of more secure employment.

Question

Quizplus · Accepted Answer

The statement that lack of income stability will induce more productive workers to leave in search of more secure employment is false. In fact, commission systems of compensation can motivate highly productive workers to remain with the company and continually strive to increase their output, as their earnings will directly correspond to their efforts.

Which of the Following Statements About Commission Systems of Compensation