Question

segment performance is also often evaluated to determine the compensation or bonuses for managers. Do you...

segment performance is also often evaluated to determine the compensation or bonuses for managers. Do you think compensation for senior segment managers should be tied to segment performance? Why or why not? Which method of evaluation do you think would be best, and why?

Homework Answers

Answer #1
Yes, I personally believe the senior segment managers compensation should be tied up with the performance of that segment. logic is quite simple that if your segment is earning good you are also earning good and vice versa. This will set a motivation in the managers to ensure that their respective segment is generating good income and in return they are also getting the benefit of that.

However, the alternate solution would be to issue stock options to such senior management. This way it can be ensured both that employee is getting good return when company is earning well and the employee keep working for the company for the longer tenure.
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