Which of the Following Is a Disadvantage of the Pay

question 62

Multiple Choice

Which of the following is a disadvantage of the pay grade approach?

• A)The administrative burden of setting separate rates of pay for numerous employees is increased.
• B)It is inflexible when it comes to moving employees from job to job.
• C)Demotions are not well received in a pay grade system when compared to a job-based system.
• D)It might give rise to some jobs being underpaid and some being overpaid.
• E)It does not recognize that performance difference in the higher levels has much impact on the organization.

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Definitions:

Average Accounting Return

A measure of the profitability of an investment, calculated as the average net income divided by the average book value of the investment.

Straight-line Depreciation

A method of allocating the cost of a tangible fixed asset over its useful life in equal annual installments.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Average Accounting Return

The ratio of the average net income that an investment generates to the average book value of the investment over its life.