The First Principle in Designing an Effective Compensation System and the Most

Multiple Choice

The first principle in designing an effective compensation system and the most dependable way to keep people focused on strategy execution and the achievement of performance targets is to

A) establish ethical compensation policies and convince employees that they are the firm's most valuable competitive asset.
B) design monetary and nonmonetary incentives that boost labor productivity and help lower the firm's overall labor costs.
C) generously reward and recognize people who meet or beat performance targets and to deny rewards and recognition to those who don't.
D) pay employees a bonus for each strategic and financial objective that the company achieves.
E) allow employees to propose what rewards they would like to receive to achieve the company's stretch objectives.