Justin is an hourly employee of Furnace Brick,a company that manufactures a special high-heat-resistant brick for industrial kilns.Justin is unhappy with the new compensation system introduced by the company's new plant manager and HR director.This system has eliminated the practice of annual raises,the Christmas bonus,and raises based on seniority for a new system that ties every employee's raise to how well Furnace Brick is performing in the market.Moreover,the plant manager has announced that twenty percent of the employees in the plant will receive no raise at all this year,regardless of the company's performance.Furnace Brick has moved from a/an ____ compensation philosophy,to a/an____ compensation philosophy.
A) wage-based, salary-based
B) paternalistic, competitive
C) entitlement, performance
D) meet-the-market, lag-the-market

Question

Quizplus · Accepted Answer

The old compensation system that provided annual raises, Christmas bonuses, and raises based on seniority is an example of an entitlement compensation philosophy. The new system that ties every employee's raise to the company's performance and with the announcement that some employees will not receive a raise regardless of the company's performance is an example of a performance-based compensation philosophy. Therefore, the company has moved from an entitlement philosophy to a performance-based philosophy.

Justin Is an Hourly Employee of Furnace Brick,a Company That