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Asked by Shayan Patel on Jul 16, 2024

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ABC Inc.is a very small firm.It has decided to pay its employees at rates that are similar to other small firms in its geographic area.What method of pay is ABC Inc.using?

A) job evaluation
B) market pricing
C) competency-based pay
D) geographic-based pay

Geographic-Based Pay

A compensation strategy that adjusts an employee's pay based on the cost of living and market wage rates in the geographic location where they work.

Market Pricing

The process of determining the external value of jobs within an organization by comparing the organization's jobs to similar jobs in the external labor market.

Small Firms

Businesses or enterprises with a small number of employees, potentially offering more personalized services and having less market influence than larger companies.

  • Recognize methods of establishing base pay.
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BH
Breanna HinnantJul 18, 2024
Final Answer :
B
Explanation :
Market pricing involves setting pay rates based on the prevailing wage rates in the external market. In this case, ABC Inc. is using market pricing by setting its pay rates similar to other small firms in the same geographic area. Job evaluation involves assessing the value of each job within the organization, competency-based pay is based on an employee's skills and abilities, and geographic-based pay involves paying employees more or less based on the cost of living in their geographic location.

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