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:

Economic Activity

Activities related to the manufacturing, disseminating, and utilizing products and services in an economic system.

Fluctuations

Fluctuations refer to variations or changes in a condition, value, or level of economic variables over time.

Inflation

The escalation speed in general price levels of goods and services, ultimately leading to diminished power for making purchases.

Unemployment

The situation where individuals who are capable of working and are actively seeking work cannot find employment.