A Compensation and Reward System Designed to Help Drive Successful

question 29

Multiple Choice

A compensation and reward system designed to help drive successful strategy execution does NOT normally encompass

• A)tying incentives to performance outcomes directly linked to good strategy execution and financial performance
• B)keeping the time between achieving the target performance outcome and the payment of the reward as short as possible
• C)making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect
• D)providing generous rewards for people who turn in outstanding performances
• E)offering rewards that amount to 3 percent of an employee's total compensation

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Definitions:

Capital Equity

The amount of money that would be returned to shareholders if all of the assets were liquidated and all of the company's debts were paid off.

Partnership Contract

A legal agreement between partners that outlines the terms and conditions of their business relationship.

Profits

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Income Ratio

A financial metric comparing earnings to another element, such as sales or assets, to assess profitability or performance.