Chapter 14: Performance Measurement, Balanced Scorecards, & Performance Rewards IM 18
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a. Individuals at different organizational levels typically view monetary rewards differently
because of the relationship of pay to standard of living.
b. Relative pay scales are essential to recognizing the value of monetary rewards to different
employees.
c. At lower employee levels, most incentives should be monetary and short term (to enhance
well being rather than short-term personal gains.
4. Performance Plans and Feedback
standards is monitored.
b. The two feedback loops in the model shown in text Exhibit 14–15 exist so that problems
d. The second feedback loop relates to the rewards given and the compensation strategy’s
5. Worker Pay and Performance Links
a. The competitive environment in many industries has undergone substantial changes that
technologies.
b. There is also more emphasis on the need for workers to perform in teams and groups.
c. Workers are more detached from the production function and more involved with higher
supervision and layers of management.
e. Research has shown that pay-for-performance is increasing in large organizations to:
i. better align activities with business strategies;
iv. ensure market competitiveness.
Chapter 14: Performance Measurement, Balanced Scorecards, & Performance Rewards IM 19
6. Promoting Overall Success
a. Many performance-based plans have the expressed goal of getting common stock into the
i. An ESOP offers both tax and incentive advantages since the employer makes tax–
deductible payments of cash or stock to a trust fund and trust beneficiaries are
the stock price.
7. Nonfinancial Incentives
a. Besides various forms of monetary compensation, workers can also be motivated by
nonfinancial factors.
b. Employees are typically more productive in environments in which they think their efforts are
appreciated.
M. Tax Implications of Compensation Elements
2. Three different tax treatments exist for employee compensation: full and immediate taxation,
deferral of taxation, and exemption from taxation.
subject to income taxation.
employees, such compensation creates additional benefits.
pension plans.
6. Certain employee fringe benefits are not treated as taxable income to the employee, but are fully
and currently deductible by the employer, such as employer-provided accident and health
insurance plans.
