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The ultimate goal of the motivational plan is to improve the equity value of the company. Share profits in proportion to the risks being taken. Owners accept risk when entrusting operations to the capability, judgment and decision-making of the people who work for them.
When an employee's income is based purely on performance, as it is in sales, the risk-to-reward scenario is much greater than for a salaried employee. An individual working under an agreement or union contract governing work behavior and performance, by comparison, will receive less of a bonus for achieving his or her goals. If they want the rewards, they should share the risk.
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- JOHN M. COLLARD Would
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