Asked by ERICA ROSENBAUM on May 31, 2024
Verified
What main indicators should firms examine in the process of examining compensation costs?
A) budgeted costs and actual costs
B) compensation cost ratios and budget ratios
C) net profit per employee and average employee earnings
D) compensation cost ratios and average employee earnings
Compensation Costs
The total expenses incurred by an employer to provide wages, salaries, and benefits to employees.
Budgeted Costs
The estimated financial expenditure allocated for specific purposes during a predetermined timeframe.
Net Profit
The amount of money that remains from revenues after all operating expenses, taxes, and costs have been subtracted.
- Understand the significance and elements of a remuneration budget.
- Assess the efficacy of reward structures by utilizing diverse measurements.
Verified Answer
ZK
Zybrea KnightJun 06, 2024
Final Answer :
D
Explanation :
The main indicators that firms should examine in the process of examining compensation costs are compensation cost ratios and average employee earnings. Compensation cost ratios indicate the proportion of total compensation costs to the total cost structure of the firm. Average employee earnings give a clear idea of the compensation structure of the company, which includes salaries, bonuses, and benefits. Therefore, these two indicators help in understanding the overall compensation cost of the firm, and how it affects the finances of the company.
Learning Objectives
- Understand the significance and elements of a remuneration budget.
- Assess the efficacy of reward structures by utilizing diverse measurements.
Related questions
What Is the Logical Time for the First Evaluation of ...
You Have Been Tasked with Providing Senior Management with a ...
In the Bottom-Up Approach to Compensation Budgeting,a Budgeted Amount Is ...
A Compensation Budget Is a Forecast of What the Firm ...
A Manager Might Decide to Move from Measuring Performance on ...