What characteristic should a company prioritize when establishing an incentive plan?

When establishing an incentive plan, a company should prioritize ensuring employee retention. This characteristic is essential because a strong incentive plan aims not only to motivate employees but also to keep valuable talent within the organization. High employee turnover can be costly in terms of recruitment, training new hires, and lost productivity. By focusing on retention, the company underscores its commitment to its employees and promotes a stable workforce, which can lead to enhanced organizational performance, teamwork, and overall morale.

Encouraging employee training, while beneficial, is more a component of development rather than a direct focus of an incentive plan. Minimizing employee costs can deter from the overall goal of creating a positive and motivating work environment. Maximizing dividend returns primarily concerns shareholders rather than employee engagement and satisfaction, which ultimately affects retention. Hence, prioritizing employee retention aligns the company's strategic objectives with the well-being and loyalty of its workforce.