Which of the Following Statements About Commission Systems of Compensation

question 117

Multiple Choice

Which of the following statements about commission systems of compensation is false?

• A)They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort.
• B)During sluggish periods, an employer's payroll expenses will decline along with sales.
• C)If workers are paid on the basis of the number of units produced, they may become less concerned about quality.
• D)The lack of income stability will induce the more productive workers to leave in search of more secure employment.

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Definitions:

Accelerating Sales

Strategies employed by companies to increase revenue generation speed, often through promotions or improved distribution.

Functional Lines

Refers to the division within an organization based on function or role, such as sales, marketing, or production.

Functional Expertise

Specialized knowledge or skills in a particular area or department within an organization.

Economies of Scale

The cost advantages that a business obtains due to expansion and the scaling up of production, leading to a reduction in per-unit costs.