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Question

  1. Define pay policy. Which competitive pay policy would you recommend to an employer? Why? Does it depend on circumstances faced by the employer? If so, which ones?
  2. There are consequences of pay level and pay mix decisions. Identify and briefly discuss each factor. What pay level does the efficiency wage predict? What pay level does the fairness wage predict? Does the theory accurately predict organization behavior? Why, or why not? 

 

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Solution Preview

Pay Policy defines the distribution of pay and benefits among the workforce. Factors like experience, skills, education qualification, and previous salary play a crucial role in forming a pay policy. A complete pay policy covers the aspect of basic salary plus compensation and benefits which support 

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