Which of the Following Statements About Incentive Pay Plans Is

question 63

Multiple Choice

Which of the following statements about incentive pay plans is true?

• A) Unlike merit pay plans, base pay is set at the market rate for incentive plans.
• B) With incentive pay, high performers earn more but no permanent adjustment is made to an employee's base pay.
• C) Once earned, the incentive pay becomes a part of the employee's base pay.
• D) Caps are used to keep incentive pay levels even with the industry pay level.
• E) There is no difference between how merit pay plans and how incentive pay plans are used to reward employee performance

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