Which of the Following Statements Regarding Performance Incentives Is True

question 7

Multiple Choice

Which of the following statements regarding performance incentives is true?

• A)Employees tend to hold onto stock options rather than sell them.
• B)Merit pay is always a successful program because employees recognize they will be rewarded only if performance increases.
• C)Profit sharing is very effective in tying individual pay to employee effort.
• D)Companies are increasingly choosing to implement team- or group-based pay-for-performance programs over individual-based pay-for-performance programs.

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Definitions:

Loans

A sum of money that is borrowed, which is expected to be paid back with interest.

Bureau of Labor Statistics

A U.S. government agency that collects, processes, and disseminates essential statistical data related to labor market activity, working conditions, and price changes.

Cyclical Unemployment

The deviation of unemployment from its natural rate.

Natural Rate

The rate of any economic activity that is considered to be sustainable in the long term without causing inflation; often used in the context of unemployment.