A Well-Designed Reward System

question 65

Multiple Choice

A well-designed reward system:

• A) ties rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives.
• B) should be free of elements that induce stress,anxiety,tension,pressure to perform,and job insecurity.
• C) puts the primary emphasis on denying rewards to those who fail to perform tasks in the prescribed fashion.
• D) emphasizes weeding out employees who are consistently low performers.
• E) strives for a 50-50 balance between positive and negative rewards and a 50-50 balance between monetary and non-monetary rewards.

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Definitions:

Involuntary Conversion

This involves compensation received for the destruction, theft, confiscation, or condemnation of property or the disposition of property under threat of these actions.

Replacement Period

The timeframe during which property must be replaced to defer recognition of gains for tax purposes under certain conditions.

Tax Due

The amount of tax liability one owes to a tax authority after all calculations are completed.

Wash Sale Rules

IRS regulations that disallow the claim of a loss on the sale of a security if a substantially identical security is purchased within a 30-day period before or after the sale.