1. Evaluate the following statement:
The overarching purpose of a measurement system should be to help a team, rather than senior managers, gauge its progress. A team's measurement system should primarily be a tool for telling the team when it must take corrective action.

2. The Green Shoe Corporation is planning going to a piece rate system, where producing workers are paid based on thei level of output. Discuss what factors the company should consider in deciding whether this idea should be implemented. How should the initial piece rate be set? Under what circumstances should the company alter the piece rate once it is adopted?

3. Your company currently has a bonus plan for its sales managers. If annual sales for a managers’ unit exceed $1 million, the manager receives a $10,000 bonus. In a typical year, about 5 of the 10 mangers in the firm meet the target and receive the bonus. However, the number receiving the bonus varies from year to year due to the state of the economy, which in turn has an event on sales. The company is considering replacing the bonus plan with a plan that rewards the top-five selling managers each year with a $10,000 bonus. Discuss the potential benefits and costs of the new plan relative to the old plan.

4. Communities are frequently concerned about whether police are vigilant in carrying out their responsibilities. Several communities have experimented with incentive compensation for police. In particular, some cities have paid members of the police force based on the number of arrests that they personally make. Discuss the likely effects of this compensation policy.