Decisions About How to Design Pay Systems Should Follow a Careful

Multiple Choice

Decisions about how to design pay systems should follow a careful consideration of all of the possible consequences associated with alternative forms of pay. Which of the following is the most important reason for organizations to adopt the performance-based pay approach to compensating its employees?

A) to reward top management
B) to keep up with competitors
C) to motivate employees
D) to help achieve their strategic objectives
E) to integrate the pay system with the organizational mission