Which of the following is NOT a sound guideline for designing a reward and incentive system that helps promote good strategy execution?
A) The reward system must be administered with scrupulous objectivity and fairness.
B) The payoff for meeting or beating performance targets must be a major, not minor, piece of the total compensation package.
C) The incentive plan should extend to all managers and all employees, not just top management.
D) The reward system must reward nonperformers who, despite expending tremendous effort, have not fared well in achieving the benchmarks under the incentive system.
E) Make sure that the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect.

Question

Quizplus · Accepted Answer

Rewarding nonperformers goes against the purpose of a reward and incentive system, which is to encourage and reward good performance. It sends the wrong message and undermines the credibility of the system, and can demotivate high-performing employees who feel that their efforts are not being recognized or appreciated.

Which of the Following Is NOT a Sound Guideline for Designing