A successful compensation scheme
A)must pay workers with comparable skills a comparable wage.
B)must induce effort from workers and ensure that both employer and employees benefit.
C)must enable workers to enjoy a certain standard of living and must enable employers to earn a normal rate of return.
D)must allow employees to participate in a firm's profits.

Question

Quizplus · Accepted Answer

A successful compensation scheme should not only induce effort from workers but also ensure that both employers and employees benefit. This means that the compensation scheme should align the interests of the employer and employees in a way that rewards employees for their contribution towards the goals of the organization while ensuring that employers earn a reasonable profit. Paying workers with comparable skills a comparable wage (A) and enabling workers to enjoy a certain standard of living while enabling employers to earn a normal rate of return (C) are important, but not sufficient, factors to consider in designing a successful compensation scheme. Allowing employees to participate in the firm's profits (D) is also important but may not always be practical or feasible for all organizations.

A Successful Compensation Scheme