All of These Are Disadvantages of the Group Incentive Plan

question 40

Multiple Choice

All of these are disadvantages of the group incentive plan EXCEPT:

• A) it de-emphasizes individual performance and rewards the non-productive as well.
• B) the rewards may be realized decades later reducing the day-to-day performance motivation.
• C) it focuses the group on specific performance targets.
• D) employees may come to regard the quarterly or annual group rewards as part of their base salary and expect them every year.

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Definitions:

Unrealized Holding

Unrealized holding refers to profits or losses on investments or assets that have increased or decreased in value but have not yet been sold or realized.

Bond Liability

Bond liability is the amount owed by a bond issuer to bondholders, including both the principal amount borrowed and any accrued interest, until the bond matures.

Futures Contract

A standardized legal agreement to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time in the future.

Market Value

The current price at which an asset or service can be bought or sold.