Corporations that offer incentive pay schemes that link pay to meeting profit, production, or sales targets are doing so to cope with the
A) scarcity problem.
B) inefficiencies usually found in large firms.
C) principal-agent problem.
D) problems of unionization.

Question

Quizplus · Accepted Answer

Incentive pay schemes are designed to align the interests of employees (agents) with those of the owners or shareholders (principals) to mitigate the principal-agent problem.

Corporations That Offer Incentive Pay Schemes That Link Pay to Meeting