Reference no: EM133076405

Question - A larger company has four main departments. The vision is that innovation is absolutely necessary for the company to deliver in the long run. For each department, they have chosen five different target figures as a basis for the company's bonus and incentive system. Three of the target figures are financial, one is related to delivery capability (time to market) and the last is a customer satisfaction target. In connection with the company's budget process, a target is always set for the individual target figures. A bonus is paid to the management team in each individual department if the coming years achieve four of the five selected target figures. Discuss the advantages and disadvantages of the chosen bonus system.