"At Artistic Floral Creations, the non-managerial employees all receive the same pay increase every year. Usually this increase is about 5%, but some years it has been as high as 10% depending on changes in the cost-of-living. Artistic Floral Creations has a philosophy of compensation."

Artistic Floral Creations has a entitlement philosophy of compensation.

Explanation:

A compensation philosophy is simply refers to a formal statement which documents a company's position about the compensation of its employees.

It is an explanation of the reason for employee payment and it creates a framework for consistency. Employers use their compensation philosophy to attract, retain and motivate employees

Entitlement philosophy of compensation therefore assumes that the employees who have worked for another year in a company are entitled to pay increases, regardless of their performance differences. This action is often geared towards a higher job performance, and job satisfaction.

Artistic Floral Creations has an entitlement philosophy of compensation.

Explanation:

Entitlement philosophy of compensation is a compensation system that organizes yearly increase in pay for employees as long as they spend another year working for their employers (an organization, firm or company).

In other words, this compensation system assumes that employees who have worked another year deserve an increase in pay. The rate of increase in pay is the same for employees. Similarly, they all get the same bonus pay-out.