Companies need to design compensation systems that _________________.
A) punish poor performance
B) reinforce the behaviors needed to meet the company's objectives
C) are easy to administer
D) do not differ significantly from those of other firms in the industry
E) are innovative

Question

Quizplus · Accepted Answer

Compensation systems should be designed to align with the company's objectives and reinforce behaviors that lead to achieving those objectives. Punishing poor performance can be demotivating and does not encourage improvement, while choosing compensation systems solely based on what other firms in the industry do may not be effective in achieving the company's own objectives. While ease of administration and innovation may also be important factors to consider, they should not take priority over alignment with the company's goals.

Companies Need to Design Compensation Systems That _________________