When determining the size of the monetary increase, what must management take into consideration for pay-for-performance to be fully successful?
A) The employer should consider the standard of living of its employees.
B) The increase should include the opportunity to increase benefits too.
C) The increase should be variable if the employee has dependents.
D) The increase must be greater than the cost of living.

Question

Quizplus · Accepted Answer

In order for pay-for-performance to be fully successful, the increase must be greater than the cost of living. This ensures that employees are being rewarded for their performance and that their compensation is keeping up with inflation. While it is important for employers to consider the standard of living of their employees and offer opportunities for increased benefits, these factors are not as crucial to the success of pay-for-performance as ensuring that the increase is significant enough to motivate employees to perform at their best. The increase does not need to be variable based on dependents, as pay-for-performance is typically based on individual performance rather than family status.

When Determining the Size of the Monetary Increase, What Must