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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

A fast-growing software firm in Pune faces high attrition among skilled engineers. Management introduces an employee stock option plan with a vesting period, plus a career-path programme and skill-based pay. Which human resource strategy objective is this package most directly aimed at?

The package aims at retaining and motivating critical talent. Stock options with vesting link employee rewards to long-term company performance, while career paths and skill-based pay encourage engineers to stay and develop, which directly addresses the attrition problem.

  1. ARetaining and motivating critical talent by aligning employee rewards with long-term company performanceCorrect
  2. BReducing the firm's tax liability on dividends
  3. CIncreasing the firm's working capital turnover
  4. DStandardising production processes across plants

Explanation

Vesting-based stock options and career paths tie employees' rewards to long-term firm success, improving retention and motivation. The other options concern tax, working capital or operations, which these HR tools do not target.

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