If You Were Developing an Incentive System Designed to Help

question 112

Multiple Choice

If you were developing an incentive system designed to help drive successful strategy execution, which compensation and reward system would you NOT consider in your strategy execution effort?

• 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 the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect
• D)generous rewards for people who turn in outstanding performances
• E)a reward system that involves 50 percent nonmonetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels

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Definitions:

Adjusting Entry

A journal entry made in accounting to update the balances of accounts at the end of an accounting period.

Workweek

A fixed time period, typically structured from Monday to Friday, used to calculate hours worked and wages for employees.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, often expressed as an annual rate.

Note Payable

A written promise to pay a specified sum of money to a designated party by a certain date, often used in business financing.