Which of the following statements is TRUE?
A) The only aspect of a compensation system which can be used to shape employee behavior is the structure of variable incentives. All other rewards only encourage continuing membership in the organization.
B) Indirect compensation and non-monetary rewards will not overcome the negatives of below-market direct compensation.
C) Since employees' understanding of their indirect rewards is so vague, HR managers should focus on the effects of tangible and direct compensation on employee attraction, retention and motivation.
D) In a total rewards system the needs and expectations of employees are balanced with the interests and costs of the employers.

Question

Quizplus · Accepted Answer

Option D is the only statement that accurately defines the purpose of a total rewards system, which is to strike a balance between the needs and interests of employees and employers. A total rewards system incorporates both direct and indirect compensation, as well as non-monetary rewards, to shape employee behavior and improve attraction, retention, and motivation. Options A, B, and C are incorrect because they either oversimplify the role of compensation in shaping behavior or underestimate the importance of indirect and non-monetary rewards in motivating employees.

Which of the Following Statements Is TRUE