Question 1
Lisa is an HR manager who has been assigned the task of establishing pay rates to ensure external equity. What should Lisa most likely do first?
◦ use wage curves to price each pay grade
◦ conduct a salary survey
◦ compare performance appraisals
◦ analyze a scatter plot of employee pay
Question 2
Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the past few years, the company's market share has dropped significantly, and employee turnover has increased. Upper management is considering the implementation of a new compensation policy in its efforts to turn the company around. Historically, the company has paid all employees similarly with some variation for seniority but no distinction between high and low performers.
Which of the following, if TRUE, best supports the argument that Homelife executives should primarily address internal equity issues when developing a new compensation plan?
◦ Homelife employees receive annual performance appraisals at which time they set career goals.
◦ Most of Homelife's former employees are now employed at competitors' stores in similar positions.
◦ Salary surveys indicate dissatisfaction among the Homelife managers in different departments.
◦ Homelife pays its sales managers commissions in addition to base salaries and health benefits.
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