Which of the Following Statements About Incentive Pay Plans Is

Multiple Choice

Which of the following statements about incentive pay plans is true?

A) Unlike merit pay plans, base pay is set at the market rate for incentive plans.
B) With incentive pay, high performers earn more but no permanent adjustment is made to an employee's base pay.
C) Once earned, the incentive pay becomes a part of the employee's base pay.
D) Caps are used to keep incentive pay levels even with the industry pay level.
E) There is no difference between how merit pay plans and how incentive pay plans are used to reward employee performance