Answer:
True
Explanation:
Incentive compensation is a system designed to motivate and reward performance. The objective of incentive compensation is staff motivation.
Most organizations employ incentive compensation as a way of encouraging their employees to work, meet and exceed target required of them by the company.
Examples of incentive compensation are bonus or profit sharing, sales comission.etc
If employees know that their actions have a direct effect on the consequences of their action, they would increase their productivity due to severance packages attached to their output like bonus , commission etc.