Which of the following is NOT an objective of a compensation program?

Which of the following is NOT an objective of a compensation program?

• A. To create alignment of employee efforts with business objectives
• B. To ensure all employees receive the same pay
• C. To be legal and defensible
• D. To be affordable for the organization

Answer: (B)

A key objective of a compensation program is to align employee efforts with the overall goals of the organization. This alignment helps to motivate employees and ensure that their contributions are directed towards achieving business objectives, ultimately leading to enhanced organizational performance. Another critical objective is to ensure that the compensation structure is legal and defensible. This means that the organization must comply with labor laws and regulations, assuring employees they are treated fairly and equitably. Additionally, it’s important for a compensation program to be affordable for the organization. This allows the company to maintain financial health while still offering competitive salaries and benefits that attract and retain talent. The statement that all employees should receive the same pay does not reflect a valid objective of a compensation program. While fairness and equity in pay are crucial, compensation systems often differentiate pay based on several factors such as job responsibilities, individual qualifications, experience, and performance. Therefore, uniform pay for all employees, regardless of varying contributions and roles, does not align with the core goals of an effective compensation strategy.

A key objective of a compensation program is to align employee efforts with the overall goals of the organization. This alignment helps to motivate employees and ensure that their contributions are directed towards achieving business objectives, ultimately leading to enhanced organizational performance.

Another critical objective is to ensure that the compensation structure is legal and defensible. This means that the organization must comply with labor laws and regulations, assuring employees they are treated fairly and equitably.

Additionally, it’s important for a compensation program to be affordable for the organization. This allows the company to maintain financial health while still offering competitive salaries and benefits that attract and retain talent.

The statement that all employees should receive the same pay does not reflect a valid objective of a compensation program. While fairness and equity in pay are crucial, compensation systems often differentiate pay based on several factors such as job responsibilities, individual qualifications, experience, and performance. Therefore, uniform pay for all employees, regardless of varying contributions and roles, does not align with the core goals of an effective compensation strategy.