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 that 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 non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels

Question

Quizplus · Accepted Answer

The choice E is not characteristic of a compensation and reward system designed to help drive successful strategy execution because it suggests that half of the rewards are non-monetary. A compensation and reward system is effective when it drives the desired behaviors and outcomes, which is more likely to happen if rewards are directly tied to performance outcomes that contribute to achieving the strategic objectives. While non-monetary rewards may have their place, they should not be the primary means of driving performance or execution of the strategy.

Which of the Following Is Not Characteristic of a Compensation