Expectancy Theory Suggests That Managers Attempting to Improve Employee Performance

question 164

Multiple Choice

Expectancy theory suggests that managers attempting to improve employee performance would be well advised to

• A) make sure that all employees are expected to meet the same standards.
• B) focus on setting monetary rewards for meeting the standards.
• C) set attainable performance goals.
• D) keep salaries earned by employees confidential.

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Definitions:

Contribution Margin Ratio

A measure that shows the percentage of sales revenue that exceeds the variable costs of production.

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as raw material costs, which vary with production volume.

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.