Which of the Following Is Not Characteristic of a Compensation

question 56

Multiple Choice

Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution?

• 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:

Deferred Contribution

Refers to contributions or payments that are postponed to a future date rather than being made immediately.

Net Assets

The total assets of a company or organization minus its total liabilities; an indicator of financial health.

Investment Income

Income generated from the allocation of funds into financial assets or properties expecting to gain profits.

Purchasing Power

The worth of a currency reflected by the quantity of goods or services a single unit of that currency can purchase.