Which of the following is a reason why some firms do not use commission pay?
A) It gives workers incentive to produce more.
B) It increases firm profits.
C) It is difficult to measure output and attribute output to a particular worker.
D) The best workers stay and less productive workers leave.

Question

Quizplus · Accepted Answer

Commission pay is based on the amount of output produced by a worker, so it can be difficult to accurately measure output and attribute it to a particular worker. This can lead to disputes between workers and management, which can reduce productivity and increase costs. As a result, some firms may choose to use other types of pay structures that are easier to measure and administer, such as salaries, bonuses, or profit sharing.

Which of the Following Is a Reason Why Some Firms