When administering a compensation program:
A) actual pay rates should not be shared outside of the human resources department.
B) open pay systems support the notion that compensation is too complicated to try to explain to employees and should be kept confidential.
C) managers who make compensation decisions must receive training on the process and how they should communicate about compensation.
D) reviewing external market data and internal alignment every five years would be sufficient.
E) changes should be made when employees raise questions and after careful market surveys have been completed rather than updating for the sake of updating.

Question

Quizplus · Accepted Answer

It is important for managers who make compensation decisions to receive training on the process and how they should communicate about compensation to ensure fairness and transparency in the process. This can help maintain employee morale and reduce the risk of legal challenges to the compensation program.

Answer: E
 Making changes to a compensation program should not be arbitrary, but rather based on careful market surveys and employee feedback. Updating compensation just for the sake of updating may create confusion and mistrust among employees. It is important to consider external market data and internal alignment regularly to ensure the program remains competitive and aligned with organizational goals.

When Administering a Compensation Program