Final answer:
It is true that when issuing raises, the wage curve, pay grades, and pay ranges should be considered to maintain equitable payment systems like the U.S. Federal General Schedule. Sticky wages also illustrate why wages are maintained during economic downturns, offering a form of protection for employees but potentially leading to unemployment.
Step-by-step explanation:
When issuing raises, it is indeed important to keep the wage curve, pay grades, and pay ranges in mind. This statement is. These components are essential for maintaining a structured and equitable payment system within an organization.
The U.S. Federal General Schedule is a clear real-world example of this structure. It includes a chart showing salary ranges for different levels of positions (grades) and ranks of seniority (steps). This helps ensure that employees are paid according to their competency, education, and experience.
Moreover, the concept of sticky wages explains why wages tend not to decrease even when the economy is weak. Employers often try to maintain wages to provide a form of insurance to employees, protecting them against wage declines in tough times. This approach can lead to high unemployment but is a common practice in wage setting. Employers are advised to consider all these factors to maintain fair pay practices and motivate their workforce effectively.