MGHB12 Final Exam - SAQs ONLY Questions and Correct Answers | Latest Update | A+

What is internal equity? Ans: - the fairness of a job's pay rate in comparison to other jobs within the same company - determined through the point system What is external equity? Ans: - the fairness of a job's pay rate in comparison to the industry average - determined through wage surveys Steps in using the point system Ans: 1. determine compensable factors 2. maximum number of pts. 3. weigh each factor 4. divide factors into levels 5. associate pay with levels 6. rate each job on factors 7. compare job's total pts. to current salary Steps in job evaluation Ans: 1. conduct wage survey 2. create market line 3. create pay policy line 4. pay grades & ranges designed around pay policy line Pay policy line Ans: Pay range structure Ans: What companies would utilize a lead line? Ans: - highly innovative industry - highly competitive labour market - market leader What companies would utilize a lag line? Ans: - lack of capital (start-ups)