Asked by ?ông Ngô Trinh on May 23, 2024
Verified
At Methods Corp., a maker of premium art pencils, the human resource department is evaluating its pay structure. A compensation specialist computes the compa-ratio of the designers and determines that it is 1.9. What problem is most likely to result from a compa-ratio of this size?
A) The company may have difficulty keeping costs under control.
B) The company may have difficulty attracting and keeping qualified employees.
C) The company may be in violation of the Fair Labor Standards Act.
D) The company may have misclassified these employees as exempt when they are nonexempt.
E) The company may not have met minimum-wage requirements.
Compa-ratio
is a metric that compares an individual's salary to the midpoint of a salary range for their position, offering insight into relative pay positioning.
Fair Labor Standards Act
A United States law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week.
Exempt Employees
Workers who are exempt from the Fair Labor Standards Act (FLSA) overtime pay requirements usually due to their job duties and salary.
- Analyze and calculate compensation ratios (compa-ratios) and understand their implications for pay structure management.
Verified Answer
BL
Brittanny LatoskiMay 28, 2024
Final Answer :
A
Explanation :
A compa-ratio of 1.9 indicates that the employees are being paid significantly above the market rate for their positions, which could lead to difficulties in controlling labor costs.
Learning Objectives
- Analyze and calculate compensation ratios (compa-ratios) and understand their implications for pay structure management.