External Equity Refers to ________

question 98

Multiple Choice

External equity refers to ________.

• A)how a job's pay rate in one company compares to the job's pay rate in other companies
• B)the fairness of an individual's pay as compared to a co-worker's pay for the same job
• C)the perceived fairness of the processes and procedures used to make decisions about compensation
• D)the use of salary surveys and job evaluation comparisons to monitor pay levels within an industry

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Definitions:

Economic System

A particular set of institutional arrangements and a coordinating mechanism for solving the economizing problem; a method of organizing an economy, of which the market system and the command system are the two general types.

Institutional Arrangements

The formal and informal rules, organizations, and practices that structure economic, political, and social interactions in societies.

Coordinating Mechanism

A system or method used to align actions and activities among different parties to achieve a common goal or objective.

Economizing Problem

The choices necessitated because society’s economic wants for goods and services are unlimited but the resources available to satisfy these wants are limited (scarce).