Ambrose, the Vice President of Compensation for a Large Software

question 34

Multiple Choice

Ambrose, the vice president of compensation for a large software company, has attended several conferences on compensation design. He has decided that the total rewards approach would work well given his company's strategy and philosophy. Which of these actions will Ambrose NOT recommend as part of his efforts to transform the company's compensation system?

• A)rationalizing the multiple existing plans under one organization-wide pay plan
• B)providing flexible and portable benefits to employees
• C)implementing knowledge-/skill-based broadbands
• D)offering variable pay in addition to base pay

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Definitions:

Capital Budgeting Techniques

Methods used to evaluate and prioritize investment projects or expenditures, such as NPV, IRR, Payback Period, and Profitability Index.

Small Businesses

Enterprises characterized by a small number of employees, limited revenue, and size within their industry.

Internal Rate of Return (IRR)

A financial metric used to estimate the profitability of potential investments.

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and attract funds.