Asked by Logan Robinson on May 22, 2024
Verified
One of the potential negative side-effects of pay in the form of sales commissions is:
A) a greater incentive for salespeople to engage in unethical or fraudulent sales practices that may eventually cause legal problems for the firm.
B) increased volatility of sales revenue for the firm.
C) the potential that pay levels may get so high that they will increase a firm's marginal wage cost more than its marginal revenue product.
D) an increased likelihood of shirking by workers.
Sales Commissions
Payments made to sales personnel, often calculated as a percentage of the sales they generate.
Unethical Sales Practices
Business methods that are deceptive, manipulative, or otherwise morally dubious, aimed at persuading customers to make purchases.
- Determine the effects of different compensation models such as stock options and profit sharing on employee behavior and overall company success.
Verified Answer
ZS
zaidoon sulaimanMay 23, 2024
Final Answer :
A
Explanation :
Pay in the form of sales commissions can encourage salespeople to prioritize making sales over ethical behavior, leading to fraudulent or unethical practices that can harm the reputation of the company and even lead to legal troubles.
Learning Objectives
- Determine the effects of different compensation models such as stock options and profit sharing on employee behavior and overall company success.