Jesse James is a manager at a local bank. Jesse’s management style is best descr

Question

Jesse James is a manager at a local bank. Jesse’s management style is best described as entrepreneurial—he is risk neutral. Wyonia Tyus is a customer service representative who reports to Jesse. Wyonia is risk averse. In designing a compensation package for Jesse and Wyonia, which type of compensation arrangement should be emphasized more? Jesse James/Wyonia Tyus

A) Performance-based/Performance-based
     B) Performance-based/Straight salary
     C) Straight salary/Performance-based
      D) Straight salary/Straight salary

Explanation / Answer

In designing a compensation package for Jesse and Wyonia, which type of compensation arrangement should be emphasized more? Jesse James/Wyonia Tyus

C) Straight salary/Performance-based

Jesse James should be paid a fixed salary as he is enterpreneurial and is neutral to risk and Wyonia Tyus should be paid on the basis of performance as he is a customer service representative and is risk averse

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