Refer to Additional Case 10.1. Brighton executives have decided to implement a decentralized pay system. Which of the following, if true, best supports this decision?
Additional Case 10.1
Brighton Manufacturing is reviewing its compensation system. The CEO wants employees to be paid wages and benefits comparable to Brighton's competitors. He wants a system that allows for maximum flexibility in reassigning workers to different jobs without requiring compensation adjustments each time. The Finance VP suggests that the company link compensation costs more closely to productivity and profit. When profits are down, compensation costs should be reduced as well. The Finance VP also believes that employees should be paid for what they produce, not for their time, and the compensation program should apply to all employees equally. The VP of HR suggests that the key to the company's success is their employees and advocates an individual-based compensation plan. People should be paid for their skills or knowledge, not just because they are fulfilling certain jobs. The VP of HR also feels that it would be simpler to implement a compensation system by level rather than by job.
A) Brighton is a large, diverse firm that has never faced legal challenges regarding compensation.
B) The Brighton CEO wants pay decisions to be made at the firm's headquarters.
C) Brighton's unit managers have never received compensation training.
D) A large percentage of Brighton's staff is non-exempt.
Answer: A
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