Which of the following is the most basic form of incentive compensation?

A) Merit pay
B) A sales commission
C) Profit sharing
D) A stock-option plan

Incentive Compensation

A performance-based payment system where rewards are offered to employees for meeting certain targets or achievements.

Merit Pay

A compensation strategy that rewards employees based on their performance and achievements, as opposed to seniority or hours worked.

Sales Commission

is a compensation method used in sales, where employees earn a percentage of the revenue they generate, incentivizing higher sales performance.