The fact that past merit payments are incorporated into an individual's base salary allowing formerly productive employees to slack off is known as:
A) merit allowance.
B) a disincentive.
C) a union contract.
D) the annuity problem.

Question

Quizplus · Accepted Answer

The annuity problem refers to the issue where past merit payments are added to an individual's base salary, potentially leading to a lack of motivation or reduced productivity as the employee may feel secure in their increased salary regardless of future performance.

The Fact That Past Merit Payments Are Incorporated into an Individual's