Herbert, the Chief Innovation Officer of an Apparel E-Commerce Site

question 97

Multiple Choice

Herbert, the chief innovation officer of an apparel e-commerce site, earns an annual fixed salary of $43,000. In addition to the salary, he is also eligible to receive five percent of the company's annual earnings after tax. Which of the following variable pay systems does this scenario best illustrate?

• A) Profit sharing
• B) Pay for knowledge
• C) Commission
• D) Stock options

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Definitions:

Expectancy Theory

A motivation theory suggesting that individuals are motivated to perform based on the expected outcome and the value of that outcome to them.

Motivated

Describes being driven or encouraged to act towards achieving a goal or fulfilling a need or desire.