Pay policies are one of the most important human resource tools for

A) reducing competition in the product market.
B) automating routine activities.
C) persuading customers that high quality is worth a premium price.
D) making decisions about product pricing.
E) encouraging desired employee behaviors.

Pay policies directly influence the behavior of employees by incentivizing certain actions or outcomes. For example, implementing a pay for performance system encourages employees to increase productivity and achieve goals that are aligned with the company's objectives. In addition, pay policies can also influence employee retention and engagement, as fair and competitive compensation is a key factor in job satisfaction.