[Solution] Organizational Reward Systems and Motivation
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Author: Sarah Bennett
An important part of motivating employees is the reward system, which encompasses the various mechanisms by which the organization defines, evaluates, and rewards employee performance.
Merit and Incentive Systems
- Merit pay: Based on employee contributions, implemented through annual raises
- Incentive systems: Direct payment for producing value (e.g., piece-rate, commissions)
A salesperson is paid a commission on every sale. This employee is being paid according to an .
View Explanation
An individual incentive plan rewards an employee each time they perform a certain behavior or meet a performance standard.
A corporation transfers shares of stock to employees over time, making them part owners of the company. Which reward system is this?
View Explanation
This company is using an ESOP to give employees an ownership stake, designed to increase their organizational commitment.
Which aspects of executive compensation are controversial? Check all that apply:
- Large size of compensation package
- Conflict with FLSA
- Lack of alignment with organizational performance
- Difficulty motivating executives
View Explanation
Controversies focus on excessive compensation amounts and weak correlation with organizational performance. Executive pay rarely conflicts with FLSA, and there's no shortage of aspiring executives.
