The statement outlines two business strategies for developing compensation systems:

Question

1. **Efficiency Focused Strategy**: This approach posits that organizational efficiency is enhanced by hiring high-quality employees and motivating existing staff to work harder. It emphasizes the need for compensation systems that attract top talent to support effective strategies.

2. **Minimum Costs Strategy**: This strategy aims to reduce labor costs to achieve economies of scale without directly lowering employee salaries. Instead, it employs methods like profit sharing and gain sharing to incentivize employees by allowing them to benefit from the company's profits

use simple explanations

Answer 1

Sure! Here’s a simpler breakdown of the two business strategies for compensation systems:

1. Efficiency Focused Strategy: This strategy is all about getting the best workers on board and encouraging current employees to put in more effort. The idea is that by offering better pay and perks, you attract talented people who can help the organization work better and smarter.

2. Minimum Costs Strategy: This strategy seeks to cut down on labor costs while keeping salaries stable. Instead of just lowering pay, it motivates employees to work harder by sharing the company’s profits with them. So, when the company does well, the workers can receive bonuses or a share of the profits, which helps keep them engaged and productive without raising basic salaries.