An Incentive System in Which an Organization Links Pay Increases

question 106

Multiple Choice

An incentive system in which an organization links pay increases to ratings on performance appraisals is referred to as

• A) commissions.
• B) the Scanlon plan.
• C) merit pay.
• D) gainsharing.
• E) profit sharing.

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Definitions:

Return Requirement

The minimum expected return an investor requires from an investment to make it worthwhile, considering the risk involved.

Dividend Irrelevance Hypothesis

A theory suggesting that the dividend policy of a company is irrelevant to its market value, as long as the firm's investment and financing decisions are unchanged.

Larger Dividends

An increase in the amount of money paid out to shareholders from a company's earnings, typically reflecting its strong financial health or a strategy to return more capital to investors.

Selling Price

The amount of money for which an item or service is sold in the market.