Senior management in your organization wants you to explain to the board of directors the key concept that makes compensation systems work. It would be correct to tell them that the ideal compensation system must
A) keep labor costs as low as possible.
B) provide for employee needs while keeping labor costs within reasonable limits.
C) pay the highest wages in the industry.
D) encourage employees to work for as little as possible to keep company profits as high as possible.
E) focus attention on benefits rather than on salaries, which are kept low on purpose.

Question

Quizplus · Accepted Answer

The ideal compensation system must provide for employee needs while keeping labor costs within reasonable limits. This means that compensation should be competitive enough to attract and retain talented employees, but also cost-effective for the organization. A well-designed compensation system can help motivate employees to perform at their best and achieve the company's goals. It must balance the interests of the organization and employees to create a win-win situation.

Senior Management in Your Organization Wants You to Explain to the Board