BUS 424- Final Exam Guide - Comprehensive Notes for the exam ( 53 pages long!)

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 424
• Professor: Johnny Jermias

Document Summary

Attraction/retention: guaranteed salaries attract risk-averse, intensive compensation. Motivational/effort inducing: work hard, agency theory attract risk seeking, aggressive, confident in abilities. Smooths earnings (compensation varies with firm perf) Tax considerations: limited tax deductibility if excessive compensation. Short-term (commissions, bonuses): employees: see efforts rewarded + employers: risk sharing, one-off payment but ignore long term. Restricted stock: improve share price + popular after standard required but retention rather than motivation. Perf stocks and option: award of shares contingent on stock price per: improve share price but depends on target thresholds, defined poorly = demotivational. Portion at risk vs fixed: higher risk attract risk seeking. Not pay for bearing risk = lose talent (uncontrollable) Group rewards: personal/cultural control, monitor + sanction but rarely provide direct effect unless small # top manager, free rider, lower level volatile even tho not affect motivation greatly. Formula-based: alleviates bias/favouritism but less focus on difficult quantify perf. Subjective: flexible, reduce manipulation but frustration, demotivation, friction,