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Brighton Manufacturing is reviewing its compensation system

Brighton Manufacturing is reviewing its compensation system. The CEO wants employees to be paid wages and benefits comparable to Brighton's competitors. He wants a system that allows for maximum flexibility in reassigning workers to different jobs without requiring compensation adjustments each time. The Finance VP suggests that the company link compensation costs more closely to productivity and profit. When profits are down, compensation costs should be reduced as well. The Finance VP also believes that employees should be paid for what they produce, not for their time, and the compensation program should apply to all employees equally. The VP of HR suggests that the key to the company's success is their employees and advocates an individual-based compensation plan. People should be paid for their skills or knowledge, not just because they are fulfilling certain jobs. The VP of HR also feels that it would be simpler to implement a compensation system by level rather than by job.

31) Refer to Additional Case 10.1. The CEO is primarily concerned about:

A) external equity.

B) skill-based pay.

C) distributive justice.

D) internal equity.

32) Refer to Additional Case 10.1. The Finance VP would most likely favor a(n):

A) variable pay system.

B) membership-based system.

C) individual-centered system.

D) egalitarian compensation system.

33) The perceived fairness of an employee's pay relative to what other employees are being paid for the same labor describes the concept of internal equity.

34) The distributive justice model of pay equity holds that the wage rate for a given occupation is set at a point where the labor supply and labor demand are equally distributed.

35) Balancing equity ensures that employees with seniority will receive greater compensation than more recent hires.

36) The primary reason variable pay is the norm in U.S. industry is because it correlates labor costs with production costs and enhances a company's competitive position.

37) As an employee's base pay increases, it is likely that the percentage of variable pay that he or she receives will decrease.

38) Membership-contingent compensation provides a similar wage to every employee in a given group, so long as they perform their job satisfactorily.

39) The relative emphasis placed on performance versus membership depends largely on the organization's culture and beliefs of top management.

40) ________ is the perceived fairness of the pay structure within a firm.

41) ________ is the perceived fairness of individual pay decisions.

Dec 12 2019 View more View Less

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