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 organizations to adopt the performance-based pay approach to compensating its employees?
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

Question

Quizplus · Accepted Answer

Adopting a performance-based pay approach helps organizations achieve their strategic objectives by aligning employee behavior with the organization's goals and objectives. This type of pay system encourages motivation, goal setting, and accountability among employees. While rewarding top management and keeping up with competitors may be factors to consider, they are not the primary reason why organizations should adopt a performance-based pay approach. Integrating the pay system with the organizational mission is also important, but it is a broader objective that applies to all aspects of the organization, not just the pay system.

Decisions About How to Design Pay Systems Should Follow a Careful