What is the rationale for companies to provide employees with bonuses, profit sharing, commissions, and stock options?

A) to save money on base salaries
B) to encourage better performance
C) to avoid paying golden parachutes
D) as an alternative to promotions
E) to ensure fairness of compensation

Answer: B
Explanation: B) Bonuses and the other tools are known as incentives. They are used to induce employees to be more effective or to attract and retain top performers.