Research on the effects of two-tier wage plans found that
A. both existing employees and new employees have a similar pay rate.
B. lower-paid employees expected to be promoted into the second tier in a short time span.
C. lower-paid employees were less satisfied on average than higher-paid employees.
D. equity theory did not come into play for either group and neither group experienced more or less job satisfaction than the other.
E. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for themselves.
Answer: E
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