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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Definitions:

Income Equality

A measure or concept where everyone has the same income or very similar incomes, minimizing the gap between the wealthy and the poor.

Tax-Transfer Program

Government initiatives designed to redistribute income through the tax system, often aiming to reduce poverty.

Economic Equality

A state in which individuals or groups within a society have similar economic conditions, including access to resources, opportunities, and outcomes.

Income Inequality

The unequal distribution of income and wealth across individuals or groups within a society, often measured using tools like the Gini coefficient.