WORLD AT WORK: C17-MARKET
PRICING EXAM 2025
Market Pricing - ✅✅✅CORRECT -tool that directly supports an organization's business strategy by
providing key competitive information on how the organization's compensation levels compare to the
market
Compensation Philosophy - ✅✅✅CORRECT -broad statement on how people should be rewarded
Compensation Strategy - ✅✅✅CORRECT -principles that guide the design, implementation and
administration of a compensation program; specifies what programs will be used and how they will be
administered
Factors influencing compensation - ✅✅✅CORRECT -1. External competitiveness
2. Pay competitiveness
3. Relevant labor market
4. Organizations must be willing and able to pay
5. In-demand employees
6. Internal vs external equity
External Competitiveness - ✅✅✅CORRECT -prevailing rate for jobs in the marketplace
Relevant labor market - ✅✅✅CORRECT -market where organization draws or loses employees
(organization size, geographic, industry)
Pay competitiveness - ✅✅✅CORRECT -prevailing market rates with whom the organization
competes; identify movement of salary; identify pay practices
Internal Equity - ✅✅✅CORRECT -employees' perceptions of fairness and consistency
, External Equity - ✅✅✅CORRECT -pay levels compared to competitors; prevailing external rates;
achieving equity; retention
Job Value - ✅✅✅CORRECT -determining which jobs are of higher value to the organization
Lead - ✅✅✅CORRECT -company consciously sets its pay at year-end anticipated market level, not at
the current market level; company's pay level will then "lead" the market until the start of the next year;
"pay leader" may be better positioned to attract and retain more experienced/higher performing
employees by offering above market pay
Lag - ✅✅✅CORRECT -company consciously set its pay equal to current market levels at beginning of
the year; may experience greater difficulty in attracting and retaining qualified employees (benefit
offerings might be used to offset below-market pay)
Lead-Lag - ✅✅✅CORRECT -company will consciously set its pay at mid-year anticipated market level;
company's pay will lead the market in the 1st half of the year and lag in the 2nd half
Business Life Cycle - ✅✅✅CORRECT -progression of steps an organization passes through from its
creation to its decline
4 Stages of Business Life Cycle - ✅✅✅CORRECT -1. Start-up
2. Growth
3. Mature
4. Decline
Start-up - ✅✅✅CORRECT -organization is new; focus is on obtaining capital, marketing
products/services, initial sales growth and cash conservation
Growth - ✅✅✅CORRECT -organization highly focused on growing sales, increasing distribution
capability and determining how to meet growing demand; generates need to begin standardizing
procedures through policy creation
PRICING EXAM 2025
Market Pricing - ✅✅✅CORRECT -tool that directly supports an organization's business strategy by
providing key competitive information on how the organization's compensation levels compare to the
market
Compensation Philosophy - ✅✅✅CORRECT -broad statement on how people should be rewarded
Compensation Strategy - ✅✅✅CORRECT -principles that guide the design, implementation and
administration of a compensation program; specifies what programs will be used and how they will be
administered
Factors influencing compensation - ✅✅✅CORRECT -1. External competitiveness
2. Pay competitiveness
3. Relevant labor market
4. Organizations must be willing and able to pay
5. In-demand employees
6. Internal vs external equity
External Competitiveness - ✅✅✅CORRECT -prevailing rate for jobs in the marketplace
Relevant labor market - ✅✅✅CORRECT -market where organization draws or loses employees
(organization size, geographic, industry)
Pay competitiveness - ✅✅✅CORRECT -prevailing market rates with whom the organization
competes; identify movement of salary; identify pay practices
Internal Equity - ✅✅✅CORRECT -employees' perceptions of fairness and consistency
, External Equity - ✅✅✅CORRECT -pay levels compared to competitors; prevailing external rates;
achieving equity; retention
Job Value - ✅✅✅CORRECT -determining which jobs are of higher value to the organization
Lead - ✅✅✅CORRECT -company consciously sets its pay at year-end anticipated market level, not at
the current market level; company's pay level will then "lead" the market until the start of the next year;
"pay leader" may be better positioned to attract and retain more experienced/higher performing
employees by offering above market pay
Lag - ✅✅✅CORRECT -company consciously set its pay equal to current market levels at beginning of
the year; may experience greater difficulty in attracting and retaining qualified employees (benefit
offerings might be used to offset below-market pay)
Lead-Lag - ✅✅✅CORRECT -company will consciously set its pay at mid-year anticipated market level;
company's pay will lead the market in the 1st half of the year and lag in the 2nd half
Business Life Cycle - ✅✅✅CORRECT -progression of steps an organization passes through from its
creation to its decline
4 Stages of Business Life Cycle - ✅✅✅CORRECT -1. Start-up
2. Growth
3. Mature
4. Decline
Start-up - ✅✅✅CORRECT -organization is new; focus is on obtaining capital, marketing
products/services, initial sales growth and cash conservation
Growth - ✅✅✅CORRECT -organization highly focused on growing sales, increasing distribution
capability and determining how to meet growing demand; generates need to begin standardizing
procedures through policy creation
