Question

Which of the following statements about forms of variable pay are true?

a. Profit-sharing plans are based on the concept that intrinsic rewards are more motivating than extrinsic rewa
b. Variable pay includes only fixed bonuses
c. Variable pay is unrelated to employee performance
d. None of the above

Answer 1

Variable pay includes various forms of performance-based pay, and profit-sharing plans are one form of variable pay. Fixed bonuses are just one example of variable pay and there can be other forms such as commission, stock options, or performance-based salary increases. Variable pay is based on extrinsic rewards.

Step-by-step explanation:

The correct statement about forms of variable pay is d. None of the above.

Variable pay includes various forms of performance-based pay that are meant to reward employees based on their performance and contributions to the organization. Profit-sharing plans, which distribute a portion of company profits to employees, are one form of variable pay. Fixed bonuses are just one example of variable pay and there can be other forms such as commission, stock options, or performance-based salary increases.

In terms of motivation, variable pay is based on the concept of extrinsic rewards. Extrinsic rewards are external factors that motivate individuals, such as money or other tangible rewards, unlike intrinsic rewards which come from within oneself.