Question

Champers 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. geographic-based pay
b. competency-based pay
c. job evaluation
d. market pricing

Answer 1

Champers Inc. is using a geographic-based pay system, setting compensation based on the standard rates of small firms in their region, ensuring competitive and fair pay.

Step-by-step explanation:

Champers Inc. is employing a geographic-based pay system. This method involves setting compensation levels based on the standard rates within a certain geographic area. Specifically, it means that the firm is aligning its pay rates with those of other small firms in the same region, which is a common practice to ensure competitive, fair, and realistic pay for employees while considering the cost of living and the prevailing wages in that area. By doing so, the firm aims to attract and retain the right talent with compensation that is commensurate with the local market.