Which of the Following Is a Reason Why Employees May

question 17

Multiple Choice

Which of the following is a reason why employees may prefer base pay over performance pay?

• A) Performance pay is not flexible enough.
• B) Base pay is directly related to their performance level.
• C) They dislike uncertainty about their compensation.
• D) Market conditions are always changing.

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Definitions:

Limited Liability

A legal structure where a company's owners are protected from personal responsibility for its debts or liabilities beyond their investment in the company.

Stakeholder Theory

A concept in organizational management and business ethics that emphasizes the importance of considering the interests of all parties affected by business activities, not just shareholders.

Financial Interests

Refers to the ownership stake or economic benefits that an individual or entity has in an asset or a transaction.

Agency Costs

The costs associated with resolving conflicts of interest between company management and shareholders.