In order to control compensation costs,administrators of merit pay programs must closely monitor the compa-ratio and what other factor?
A)The number of pay grades in the pay structure.
B)The distribution of performance ratings.
C)The number of new hires.
D)The company's stock price.

Question

Quizplus · Accepted Answer

The distribution of performance ratings is important because it affects the distribution of merit pay. If a large percentage of employees receive high ratings, it may be difficult for the organization to afford to pay them all at the same high rate. Administrators must ensure that performance ratings are accurate and in line with the organization's goals and expectations.

In Order to Control Compensation Costs,administrators of Merit Pay Programs