A Problem with the Hay System of Compensating Workers Is

question 208

Multiple Choice

A problem with the Hay system of compensating workers is that:

• A) because it is relatively new, most workers and managers are unfamiliar with it.
• B) the EEOC has declared it illegal because it discriminates against older workers.
• C) it is difficult and expensive to administer because of the extensive paperwork needed to compute wages and salaries each pay period.
• D) it can lead to resentment because more productive employees may earn less than employees who do not perform as well but have worked for the company longer.

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Definitions:

Relevant Market Definition

The identification of the bounds of competition including both the geographic and product spaces in which firms compete.

Federal Trade Commission (FTC)

A U.S. federal agency established for the purpose of protecting consumers and promoting competition by preventing anticompetitive, deceptive, and unfair business practices.

Clayton Act

An antitrust law enacted in 1914 to prevent anti-competitive practices, monopolies, and to protect the rights of consumers and businesses.

Robinson-Patman Act

A United States federal law aimed at preventing anticompetitive practices by producers, specifically price discrimination.