Final answer:
The best incentive compensation plans are characterized by linking rewards to performance, setting achievable and mutually agreed upon goals, and addressing both company and employee needs, fostering growth, satisfaction, and positive relations. Thus (option a) is right answer.
Step-by-step explanation:
Characteristics of the best incentive compensation plans include that they should indeed link rewards to performance to foster motivation and productivity.
Moreover, these plans should consist of goals that are achievable and appropriate, ensuring that employees feel the targets are within reach and align with their capacity to deliver results. While aspirational goals can be motivating, setting generally unattainable stretch goals can have a discouraging effect and may not be effective. It's essential that incentive compensation plans take into account the needs of both the company and the employees, finding a mutually beneficial balance.
Plans should be co-created with the input of both employees and management to ensure buy-in and agreement on the expected outcomes and the fairness of the rewards structure. It is through these collaborative efforts that incentive plans can lead to enhanced personal growth, increased job satisfaction, and contribute to positive professional relations.
Thus (option a) is right answer.