Question

A stock brokerage firm incents in-house brokers with trips if they generate more than $500,000 worth of sales in a particular fund that the firm currently owns 20% in. Management asks HR to comment on the program. What should HR recommend?

Recommend that this unethical practice stop and discuss alternative incentive plans.
Allow this practice to continue without comment as long as it has a positive effect on revenue.
Require that this illegal practice stop to avoid potential risks of noncompliance.
Suggest lowering the dollar amount to mitigate risks of unethical behavior or revenue loss.

Answer 1

HR should recommend that this unethical practice stop and discuss alternative incentive plans.

Step-by-step explanation:

HR should recommend that this unethical practice stop and discuss alternative incentive plans. Incentivizing brokers to generate sales based on the firm's ownership in a particular fund creates a conflict of interest and can lead to unethical behavior. Instead, HR should explore other ways to motivate and reward brokers that align with ethical standards and promote long-term success for the firm.