Decisions About How to Design Pay Systems Should Follow a Careful

question 41

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 introducing performance-based pay?

• 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

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Definitions:

EPS

Earnings Per Share (EPS) is a financial ratio that measures the amount of net income earned per share of stock outstanding.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains the same.

Market Price

The prevailing cost at which you can buy or sell a service or asset in the market.

Shares Outstanding

Shares Outstanding refer to all shares currently owned by shareholders, company insiders, and investors in the public domain, representing the total equity ownership of a company.