Which Is the Fundamental Principle of Internally Consistent Compensation Systems

question 4

Multiple Choice

Which is the fundamental principle of internally consistent compensation systems?

• A)Pay rates should mirror pay rate differences among the competition.
• B)Jobs that require higher qualifications should be paid more than jobs that require lower qualifications.
• C)All jobs should be valued equally because every job directly contributes to competitive advantage.
• D)All jobs should be valued according to need.

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Definitions:

Effective-interest Amortization

A method of calculating the amortized cost of a bond or loan by applying the effective interest rate to the outstanding balance.

Interest Payment

The payment made to a lender by a borrower in return for the use of borrowed money, typically represent a fixed percentage of the principal.

Book Value

The net value of a company's assets, calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Straight-line Amortization

A method of evenly spreading the cost of an intangible asset over its useful life.