Question

Acme Corp. pays its computer programmers 12 percent less than programmers at other companies in the area. What sort of issue does this create?

a. Lack of internal equity.
b. Lack of external equity.
c. Inflated compa-ratio.
d. Faulty job evaluation

Answer 1

The issue created by Acme Corp. paying its computer programmers less than other companies is a lack of external equity.

Step-by-step explanation:

The issue created by Acme Corp. paying its computer programmers 12 percent less than programmers at other companies in the area is a lack of external equity. External equity refers to the fairness of an organization's pay structure compared to what other companies are paying for similar positions. By paying less than other companies, Acme Corp. is not providing competitive compensation, which can lead to difficulties in attracting and retaining skilled programmers.