Compare and contrast the three types of decisions that are crucial for designing an effective pay plan.

What will be an ideal response?


Three types of decisions are crucial for designing an effective pay plan:

•    Pay level: the choice of whether to be a high-, average-, or low-paying company.
•    Pay structure: the choice of how to price different jobs within the organization.
•    Individual pay decisions: different pay rates for jobs of similar worth within the same family.          

o    Differences in pay within job families are decided in two ways. First, some jobs are occupied by individuals with more seniority than others. Second, some people may perform better and therefore deserve higher pay.

Business

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Indicate whether the statement is true or false

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