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Many students who study using our platform have reported that a large number of the practice questions here are very similar to those that appear in real exams. View Courses
Many students who study using our platform have reported that a large number of the practice questions here are very similar to those that appear in real exams. View Courses
Which type of incentive focuses on long-term organizational performance rather than immediate results?
Correct Answer: C. Deferred bonus
A deferred bonus focuses on long-term organizational performance rather than immediate results. It rewards employees based on sustained success, typically distributed after a set period. This approach encourages retention, accountability, and alignment with strategic goals. Deferred bonuses link compensation to long-term profitability, productivity, or shareholder value, promoting decisions that benefit the organization over time rather than encouraging short-term gains. They are common in executive compensation and strategic incentive plans.
Why Other Options are Incorrect:
A. Spot bonus
A spot bonus rewards immediate performance or exceptional actions, usually given on the spot. It motivates short-term achievements rather than aligning with long-term organizational success or performance sustainability over future periods.
B. Gainsharing
Gainsharing is based on short-term improvements in productivity or efficiency. It distributes financial gains among employees and the company but focuses on immediate operational results, not the organization’s long-term strategic performance.
D. Merit pay
Merit pay rewards individual employees for recent performance based on annual evaluations. It is tied to short-term achievements and incremental salary increases, not deferred or long-term outcomes tied to organizational performance metrics.
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