Diversified firms are more likely to link employee pay with business unit performance,whereas less diversified firms are more likely to link employee pay with corporate performance.

Question

Quizplus · Accepted Answer

This is because diversified firms have multiple business units, each with their own specific goals and targets. It makes sense to link employee pay with business unit performance as it reflects the performance of the unit that the employee is working in. On the other hand, less diversified firms have fewer business units and are more likely to focus on overall corporate performance to determine employee pay.

Diversified Firms Are More Likely to Link Employee Pay with Business