Chapter 26 - Answer - MANAGEMENT ACCOUNTING Solutions...

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MANAGEMENT ACCOUNTING - Solutions Manual CHAPTER 26 EXECUTIVE PERFORMANCE MEASURES AND  COMPENSATION I. Questions 1. Incentive compensation is a monetary reward that is based on measured performance. Organizations where employees have been given the responsibility to make decisions are best suited for incentive compensation systems. 2. The four guidelines are: fairness, participation, basic wage level, and independent wage policy. Fairness deals with the ratio of salaries of the highest paid to lowest paid employees. Participation states that all employees should be included in a compensation plan. Although, they do not need to be included in the same one. Basic wage level states that a market wage should be paid, and incentive compensation should not be used to adjust the market wage downward. Independent wage policy states that the incentive compensation system for the most senior levels of the organization should be set by a group that is independent of senior management. 3.
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This note was uploaded on 07/18/2011 for the course ECON 102 taught by Professor Sadassad during the Spring '11 term at Abant İzzet Baysal University.

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Chapter 26 - Answer - MANAGEMENT ACCOUNTING Solutions...

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