The relative level determines if the rewards strategy is ________.

The correct answer highlights that the relative level of compensation determines whether the rewards strategy is greater than or less than market reference. This aspect is crucial in compensation strategy, as it directly influences how an organization positions itself in the labor market.

When an organization assesses its compensation relative to the market, it uses benchmark data to establish a competitive stance. This can involve analyzing salary surveys, industry standards, and geographic location to determine where its compensation levels stand compared to competitors.

If the compensation package is intentionally set higher, it can attract top talent, while being set lower might lead to retention issues or challenges in attracting qualified applicants. Consequently, understanding if a rewards strategy is above, at, or below market reference is essential for HR to make informed decisions that align with organizational goals and labor market conditions.

This focus on market relative positioning supports overall recruitment and retention strategies and ensures that employee rewards are aligned with what is being offered in the external market.