Final answer:
A worker being paid $8.50 an hour when the pay range for the grade is $7 to $8 is referred to as a green-circle rate. This indicates that the employee is earning above the maximum rate for their pay grade, which can happen due to exceptional skills or experience.
Step-by-step explanation:
When a worker is paid $8.50 an hour while the pay range for that grade is $7 to $8 an hour, this situation is referred to as a green-circle rate. A green-circle rate is an arrangement where an employee receives a higher rate of pay than the maximum established for their pay grade or range.
It often occurs when the skills or experience of a worker are deemed to be especially valuable to the organization, or for other reasons such as pay equity adjustments.
In contrast, a red-circle rate refers to a situation where an employee's pay rate exceeds the range, and the company plans to freeze or reduce the rate over time. A pay differential typically refers to variations in pay given to employees for working different shifts, locations, or jobs. A compressed salary implies a narrow pay range within a job grade.
A pay differential refers to the difference in wages paid to workers based on various factors such as skills, experience, or job responsibilities. In this case, the worker is being paid $8.50 an hour, which is above the pay range of $7 to $8 an hour. This means the worker is receiving a higher wage compared to others in the same grade, indicating a pay differential.