R&D Storage is a small,but diversified,moving and storage company.In recent years,its profit has declined to unacceptable levels.To change the direction of the company,the board of directors hired a new chief executive officer.She is currently considering three alternative ways to reward division managers for performance.They are:
1.Give each manager a competitive salary with no bonus for performance.
2.Give each manager a base salary with the largest portion being a bonus based on performance,ROI being the yardstick.
3.Give each manager a base salary with a bonus based on comparative performance with the other divisions.
Required:
Evaluate each of the ideas,giving strengths and weaknesses.
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The Answer of R&D Storage is a small,but diversified,moving and storage company.In recent years,its profit has declined to unacceptable levels.To change the direction of the company,the board of directors hired a new chief executive officer.She is currently considering three alternative ways to reward division managers for performance.They are:
1.Give each manager a competitive salary with no bonus for performance.
2.Give each manager a base salary with the largest portion being a bonus based on performance,ROI being the yardstick.
3.Give each manager a base salary with a bonus based on comparative performance with the other divisions.
Required:
Evaluate each of the ideas,giving strengths and weaknesses.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

R&D Storage Is a Small,but Diversified,moving and Storage Company