In Order to Control Compensation Costs,administrators of Merit Pay Programs

question 14

Multiple Choice

In order to control compensation costs,administrators of merit pay programs must closely monitor the compa-ratio and the:

• A) number of pay grades in the pay structure.
• B) an individual's performance ratings.
• C) number of new hires in the company.
• D) company's stock price in the financial year.
• E) average pay of the area where the organization is functioning.

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Definitions:

Arbitraging

The practice of buying a product or asset in one market and selling it in another to profit from a difference in price between the two markets.

Transportation Costs

Expenses involved in moving goods or services from one location to another.

Real Price

The market price adjusted for inflation, showing the purchasing power of an amount of money.

CPI

The Consumer Price Index represents a calculated average of the prices for a mix of consumer products and services, including food, transportation, and healthcare, weighted by their importance.