Which of These Performance-Based Rewards Tends to Create the Strongest

question 4

Multiple Choice

Which of these performance-based rewards tends to create the strongest psychological connection between the individual employee's work effort and the reward received?

• A)Employee stock option plan
• B)Gainsharing plan
• C)Employee stock ownership plan
• D)Profit sharing plan
• E)None of these rewards offer any psychological connection between the individual employee's work effort and the reward received.

---

Definitions:

NPV Estimates

Calculations used to determine the Net Present Value of an investment, forecasting the difference between the present value of cash inflows and outflows.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase its profits by increasing sales, given its fixed costs.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes (scenarios), thus helping in the decision-making process.

Net Present Value

A calculation that compares the value of all cash inflows and outflows of a project or investment, discounted back to their present value.