Karen,president of a small restaurant chain,would like to centralize compensation decisions.She asks you about the pitfalls of such a move,and you should most likely respond that:
A) internal equity would not be maintained.
B) it is likely that the company will not be able to defend itself legally.
C) external equity is difficult to maintain.
D) it is only beneficial during great economic prosperity.

Question

Quizplus · Accepted Answer

Centralizing compensation decisions can make it difficult to maintain external equity because it may not allow for adjustments based on local market conditions or the cost of living in different areas where the company operates.

Karen,president of a Small Restaurant Chain,would Like to Centralize Compensation