Senior Management in Your Organization Wants You to Explain to the Board

question 26

Multiple Choice

Senior management in your organization wants you to explain to the board of directors the key concept that makes compensation systems work.It would be correct to tell them that the ideal compensation system must

• A) keep labor costs as low as possible.
• B) provide for employees needs while keeping labor costs within reasonable limits.
• C) pay the highest wages in the industry.
• D) encourage employees to work for as little as possible to keep company profits as high as possible.
• E) focus attention on benefits rather than on salaries,which are kept low on purpose.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting and variance analysis.

Food and Supplies

The materials and items used in the preparation of food or the provision of services, typically involving consumable goods.

Tenant-Days

A measure used in the hospitality and rental industry, representing the total number of days tenants occupy a space within a given period.

Planning Budget

A financial plan to estimate the revenue and expenses for a specific period in the future, guiding a business's spending and operations.