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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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Q 1.Why do you think the compensation plans differ at the two firms? In particular, why do you think Macey’s pays commissions to salespeople, while Parkleigh does not? Why does Parkleigh offer employees discounts on purchases, while Macey’s does not? 2. Assume, for the moment, that neither store pays sales commissions. Parkleigh offers an hourly wage plus the employee discount. Macey’s offers only an hourly wage. Do you expect Macey’s hourly wage to be higher or lower than Parkleigh’s? Why?

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1. Incentives are one of the most important aspect or tool of any organisational structure and the performance of the employees is driven by the incentives that is given to them.