What is leverage really all about?

Wikipedia tells us that: Leverage is a factor by which a lever multiplies a force - it is therefore related to mechanical advantage. The use of leverage in reward plan design really doesn't stray too far from these mechanical definitions. Essentially, we apply leverage in reward plan design in order to increase the motivational power of a reward.

What is a good example of leverage?

Operating leverage is the measure of a company's fixed costs compared to their total costs. Fixed costs stay the same each period, and variable costs change as production rates change. For example, rent and property taxes are fixed costs because a company needs to pay the same amount each period, regardless of production levels. An example of a variable cost would be a sales commission. As an employee sells more products, the sales increase, and so does the company's cost.

What does the word "leverage" mean?

There are two primary definitions in the English dictionary of the word leverage, and they are both nouns. The first meaning is defined as using a lever or object to exert force on an object to move it more easily.

What does leverage stand for?

leverage, purchase (noun) the mechanical advantage gained by being in a position to use a lever. see more »