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Under an accelerated commission schedule, what happens as a salesperson's sales rise?
AThe base salary is withdrawn once sales pass a set level
BThe commission rate falls to protect the firm's margin
CThe incentive becomes increasingly more attractive
DThe employee moves onto a fixed annual salary instead
Answer & Solution
Correct answer: C. The incentive becomes increasingly more attractive
1. An accelerated schedule raises the commission rate as each higher band of sales is reached.
2. Every additional rupee of sales therefore earns more than the one before it.
3. That makes the incentive increasingly more attractive and rewarding as sales grow, which is how pay works as a powerful motivator.
4. Option B describes the opposite pattern, a decelerating schedule, which would weaken the incentive rather than sharpen it.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 8 "Managing Human Resources and Labor Relations", section Types of Compensation or Pay_
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