Decisions About How to Design Pay Systems Should Follow a Careful

question 72

Multiple Choice

Decisions about how to design pay systems should follow a careful consideration of all of the possible consequences associated with alternative forms of pay. Which of the following is the most important reason for organizations to adopt the performance-based pay approach to compensating its employees?

• A) to reward top management
• B) to keep up with competitors
• C) to motivate employees
• D) to help achieve their strategic objectives
• E) to integrate the pay system with the organizational mission

---

Definitions:

Grow Amount

The process of increasing the size or value of something, often related to investments or savings over time.

Simple Interest

A financial calculation approach where interest is only derived from the base amount, not including any interest that has built up over time.

Deposit Reached

Achieving the required minimum amount of money in an account to fulfill a particular condition.

Deposit Value

The amount of money placed in an account or invested, which can earn interest over time.