Given changes in financial circumstances of an organization,senior management requests recommendations geared towards containing compensation costs.What would NOT be a recommendation that you would bring forward?
A) Enact a hiring freeze.
B) Contain benefit costs.
C) Replace some raises with bonuses.
D) Replace variable pay with fixed pay.

Question

Quizplus · Accepted Answer

Replacing variable pay (such as bonuses or commissions) with fixed pay could actually increase compensation costs as employees may expect higher base salaries to make up for the loss of variable pay. The other options (enacting a hiring freeze, containing benefit costs, and replacing some raises with bonuses) all focus on controlling costs without increasing compensation expenses.

Given Changes in Financial Circumstances of an Organization,senior Management Requests