Question

John is the owner of the restaurant, The Round. He decides to increase employee motivation by introducing benefit packages. However, Nina, the manager, suggests that employees will be more motivated if John increases their actual wages. Which of the following statements, if true, strengthens Nina's argument?
a. John's competitor, Mark, gives many benefits to his employees.
b. The state has introduced mandatory requirements for employee benefits.
c. Benefit packages are more difficult to understand by employees than pay structures.
d. Most of the employees at The Round belong to the age group that looks forward to pensions.
e. Employees do not prefer cash compensation due to higher tax rates in the state.

Answer 1

Answer:

C) Benefit packages are more difficult to understand by employees than pay structures.

Explanation:

It is always much simpler to understand a salary raise than the benefits of perks like profit sharing, stock options, paid vacations, yoga classes at work, personal days off, etc.

Imagine if your boss tells you to choose between getting a $5,000 raise or receiving a small percentage of the company's profit. Unless you know the financial statements of the company and know how to interpret them, you will probably choose the salary raise. It's logical to assume that benefits aren't free and that if the company offers them to you is because they are probably than giving you a raise. That is not always the case, but most of the employees don't have access to the information or the ability to understand how the company is managed.