Question: Explain why it is useful to focus on the two component ratios of the ROI calculation,rather than on the ROI ratio itself. Can the residual

  1. Explain why it is useful to focus on the two component ratios of the ROI calculation,rather than on the ROI ratio itself.
  2. Can the residual income measure eliminate all of the disadvantages associated with ROI? Explain your answer.
  3. Explain why many companies link achivevment of performance targets to employee remuneration.
  4. Outline the differences between extrinsic and intrinsic motivation, and explain how organisations can encourage intrinsic motivation.
  5. What is a share option? is the inclusion of share options in remuneration packages likely to lead to intrinsic or extrinsic motivation? Explain your answer.

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