To incentivize the business operations unit, what type of reward will Fresh Munchables offer if they reach their goal of opening new retail locations?

Prepare for the HRM/324T Total Compensation Test with engaging flashcards and multiple-choice questions. Boost your understanding with explanations for each question and get exam-ready!

Incentivizing employees in a business operations unit to reach specific goals, such as opening new retail locations, is effectively supported by offering fixed individual bonuses. This type of reward directly aligns with achieving defined performance targets. A fixed individual bonus typically serves as a strong motivator, as it provides a clear, upfront expectation of the reward attached to specific outcomes, such as hitting the target of opening new locations. This approach fosters motivation among employees, encouraging them to focus on achieving team objectives, thus directly tying their efforts to measurable company success.

Other forms of compensation, like stock options, are usually linked to long-term performance and may not yield immediate reward perceptions tied to specific tasks or goals. Commission systems are more appropriate for sales-related roles where individual sales performance is the primary focus. Likewise, an increase in base salary is generally seen as a permanent change to compensation and does not inherently incentivize performance tied to achieving short-term goals. Therefore, a fixed individual bonus is particularly effective in this context of boosting immediate efforts toward achieving the company's strategic objectives.

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