Asked by Gladys Surigao on Sep 24, 2024

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​A consequence of an incentive contract for employees is that

A) ​employees must incur additional risk
B) employee level risk is reduced
C) employer level risk is reduced
D) ​there are no risk related consequences

Incentive Contract

An agreement designed to motivate performance by aligning the interests of parties, typically involving rewards for achieving specified objectives.

Additional Risk

Extra exposure to uncertainty or potential financial loss that comes with certain investments or business activities.

Employee Level Risk

The exposure to potential adverse effects on employees' health, safety, and well-being within the workplace.

  • Explore the risks associated with incentive contracts and their impact on both employers and employees.
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RR
Rainier Reyes4 days ago
Final Answer :
A
Explanation :
Incentive contracts typically tie compensation to performance metrics, which introduces variability in earnings for employees based on their performance or company outcomes, thus increasing their risk exposure.